Law & Governance
Tackling the Key Procedural and Evidentiary Issues in Drug and Device Litigation
The litigation of claims involving pharmaceutical drugs and medical devices raises a host of procedural and evidentiary issues that must be tackled. How one approaches these issues can have a significant impact on the success of litigation. This paper will examine the key procedural and evidentiary issues and discuss how they may be used as tools or how they arise during the course of legal proceedings. One of the key concerns in liability litigation is maintaining the confidentiality of communications between solicitor and client, or of documents created in preparation for litigation. Typically, parties will claim privilege over documents or communications which they seek to protect from disclosure in the discovery process and at trial. Protective orders, used to prevent the dissemination of confidential information, provide an important tool to manufacturers of drugs and devices in avoiding the disclosure of their trade secrets to the general public. Consequently, they should be considered whenever litigation involves commercially sensitive information. The law on subsequent remedial measures and on spoliation continues to develop and remains unsettled with respect to the court's treatment of these issues. Nevertheless, this paper will demonstrate that these are two evidentiary areas that should not be overlooked in preparing for or arguing a court action. Finally, the recent developments in U.S. cross-border evidence gathering will be examined.
Legal privilege is a mechanism available to protect from disclosure confidential communications, or documents prepared for adversarial proceedings. The two main types of legal privilege are solicitor-client privilege and litigation privilege. The distinctions between them are addressed in detail by the Ontario Court of Appeal in General Accident Assurance Company v. Chrusz, the leading decision on privilege.1
Litigation privilege is the narrower of the two privileges. It applies to communications between solicitors, clients and third parties for the purpose of contemplated litigation, and to documents created in anticipation of litigation. Carthy J.A., writing for the majority in Chrusz, held that the rationale for litigation privilege is the protection of information to facilitate the adversarial process, namely, investigation and preparation of a case for trial.2 Litigation privilege is not absolute, but can be limited by other competing interests. In considering a claim of litigation privilege, courts must weigh the interest of privacy to facilitate adversarial preparation against the competing interest of disclosure to foster a fair trial.3
Limitations on litigation privilege
Unlike solicitor-client privilege, litigation privilege ends when the action ends. Litigation privilege applies to all third-party communications when they are made in confidence and for the purpose of trial preparation.4
The scope of disclosure is often dictated by the Rules of Civil Procedure.5 For example, Rule 31.06(3) (Ontario) provides that a party may, on an examination for discovery, obtain disclosure of the findings, opinions and conclusions of an expert engaged by the party being examined, unless the party being examined undertakes not to call the expert as a witness at trial. This rule makes discoverable information that might otherwise be privileged.
Dominant purpose test
Communications or documents are often created for multiple purposes. Litigation privilege attaches only if the communication was made for the dominant purpose of reasonably contemplated litigation. Appellate courts in Nova Scotia, New Brunswick, British Columbia and Alberta have adopted the dominant purpose standard, as has the Ontario Court of Appeal in Chrusz.6
The test has three elements:
- the document must have been produced with the contemplated litigation in mind;
- the document must have been produced for the dominant purpose of receiving legal advice or as an aid to the conduct of litigation; and
- the prospect of litigation must be reasonable. This means that a document that existed before contemplation of litigation but is given by the client to the solicitor for the purposes of the action is not necessarily privileged.7
Work product privilege
Attorney work product or lawyer's brief privilege is a subcategory of litigation privilege. The scope of protection to be given to documents collected by a lawyer and included in the lawyer's brief in preparation to advise a client or conduct proceedings continues to be a dynamic area in the law of privilege in Canada. For example, a public document that is obtained in the process of preparation for litigation and is included in counsel's brief may not meet the test of being created for the purpose of litigation.8
The Court in Chrusz refers to the description by Wigmore of solicitor-client privilege, which was also adopted by the Supreme Court of Canada. Solicitor-client privilege protects communications made in confidence between a client and legal counsel for the purpose of obtaining legal advice. Those communications are protected from disclosure unless privilege has been waived. According to the judgment of Doherty J.A. in Chrusz, solicitor-client privilege serves to promote frank communications between client and solicitor where legal advice is being sought or given and to facilitate access to justice. It recognizes that the relationship and the communications between solicitor and client are essential to the operation of the legal system and adversarial process.9
In order to justify solicitor-client privilege, the communication must be confidential. The client must have expressly made the communication confidential or could reasonably assume under the circumstances that the solicitor understood that confidentiality was intended.10
Doherty J.A. also discusses the principle that solicitor-client privilege can extend to communications between a solicitor or a client and a third party, if that third party is an agent of the lawyer or the client. Typically, an agent is someone who is employed on behalf of a client to communicate with the solicitor to obtain legal advice, who serves as a line of communication between the client and solicitor, or who uses expertise to convey and explain information from a client to the solicitor. According to Doherty J.A., the applicability of the solicitor-client privilege to third party communications depends on the nature of the function that the third party was retained to perform for the client. He distinguishes between third parties employed by the client to obtain the legal advice of the solicitor and those retained only to perform certain work for the client relating to the obtaining of legal advice. Communications of the former are protected by solicitor-client privilege, but communications of the latter are outside the scope of the privilege.11
Wigmore's considerations as to whether a communication is privileged has been adopted and applied by the Supreme Court of Canada in several cases, including R. v. Gruenke,  3 S.C.R. 263. The test provides a principled approach that can take into account the facts of the particular case before the court.
- The communication must originate in a confidence that it will not be disclosed.
- Confidentiality must be essential to the full and satisfactory maintenance of the relation between the parties.
- The relationship between the parties must be one which in the opinion of the community ought to be sedulously fostered.
- The injury that would inure to the relationship by disclosure of the communication must be greater than the benefit gained for the correct disposal of litigation.
Practical considerations in maintaining or defeating claims of privilege
The onus is on the party asserting the privilege to establish an evidentiary basis for it. Under rule 30.03 of the Ontario Rules of Civil Procedure, a party is to prepare an affidavit of documents setting out the privilege claim and listing the communications for which privilege is claimed. Each document for which privilege is claimed should be numbered consecutively, the grounds for claiming privilege for each document should be clearly stated, the nature and date of each privileged document and other particulars sufficient to identify it should be set out, and the author and recipient of each privileged document should be disclosed.12
Under rule 30.06, where the court is satisfied by evidence that a claim of privilege may have been improperly made, the court may
- order cross-examination of the affidavit of documents;
- order service of a further affidavit of documents;
- order disclosure or production of the document, if it is not privileged; and
- inspect the document for the purpose of determining its relevance or the validity of a claim of privilege.
Privilege and in-house counsel documents
The communications of in-house counsel may be of relevance in drug and device litigation. Privilege can be prevented from attaching to in-house counsel documents in the following circumstances:
- in-house counsel who hold other positions communicate legal advice to the corporation
in one of their non-legal capacities;
- the communication does not seek or offer legal advice;
- the communication was not intended to be confidential; and
- the document was not prepared primarily for use in relation to litigation.13
Waiver of Privilege
The most common way in which privilege is lost is through waiver by the client. Examples of waiver include the following circumstances: where the communication was put in as evidence in a previous action; where the privileged communication is referred to in an affidavit; where the privileged communication is sent to a third party.14
If the client voluntarily discloses confidential communications with his or her solicitor, that is an express waiver of privilege. If the client's conduct demonstrates an intention to forego privilege, courts may find that there was implied waiver.15
Where a communication is adduced as evidence at trial, privilege is waived. If part of a privileged communication is released at trial, then privilege has been waived for the entire communication, unless the communication is severable because it deals with different matters.16
If significant contents of a communication are disclosed or sufficient reliance is placed on the communication in a pleading, then privilege has been waived.17 During the course of discovery, privilege may be waived if the party asserting the privilege refers to a privileged communication and that reference forms part of the party's evidence.18
Experts and waiver of privilege
Experts are often retained in drug and medical device litigation. Counsel should exercise care when determining what documents to give experts to review and opine on, because those documents may become discoverable pursuant to rule 31.06(3), as discussed above. It is advisable to refrain from giving experts those documents over which privilege is claimed, unless a protective order that includes the experts is in place, as will be discussed later in this paper.
In fact, there is case law in which privilege was found to have been waived where documents and materials were provided to experts. In Enterprise Excellence Corp. v. Royal Bank,19 the defendants moved for production of documents and information provided by the plaintiffs or their lawyer for the purpose of a damage report, which they had produced to the defendant. The lawyer had provided a draft of his written argument to the expert. The Court found that the plaintiffs waived any privilege which attached to the report, to the factual contents of their lawyer's written argument, and to the factual content of the telephone conversations with the expert, as these materials were provided to the expert to assist him in preparing his report on damages.
Proper Use Of Protective Orders
It is well known and understood that, "one of the underlying principles of the judicial process is public openness, both in the proceedings of the dispute, and in the court documents that are relevant to its resolution".20 Nevertheless, situations arise where the court is asked to strike a balance between this principle and the interests of justice between the parties, including the bona fide commercial and proprietary interests of parties to litigation.21 Where the interests of one or more of the parties prevail over public openness, the Courts have developed the practice of providing a protective or confidentiality order22 requiring that information obtained in preparation for trial be maintained in confidence and not accessible to the general public. Protective orders provide an important tool in drug and device litigation, particularly in the early stages of a proceeding, by prohibiting the disclosure to the general public of costing and pricing information, as well as scientific and technical information regarding the drugs and devices and their constituent elements or parts. All of this information obviously represents important commercial and proprietary interests that are in need of protection.
The Supreme Court of Canada recently established a two-part test for determining whether or not a protective order is warranted:23
A confidentiality order should only be granted when:
- such an order is necessary in order to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonably alternative measures will not prevent the risk (the "Necessity Branch"); and,
- the salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which in this context includes the public interest in open and accessible court proceedings (the "Proportionality Branch").
When considering the Necessity Branch of the test, Mr. Justice Iacobucci articulated three elements that should be taken into account:24
- The risk in question must be real and substantial, in that the risk is well-grounded in the evidence and poses a serious threat to the commercial interest in question.
- In order to qualify as an "important commercial interest", the interest in question cannot merely be specific to the party requesting the order; the interest must be one which can be expressed in terms of a public interest in confidentiality.
- The phrase "reasonably alternative measures" requires the judge to consider not only whether reasonable alternatives to a confidentiality order are available, but also to restrict the order as much as is reasonably possible while preserving the commercial interest in question.
Jurisdiction to Grant Protective Orders
In Ontario the general jurisdiction to grant a protective order is derived from the Courts of Justice Act25 and the Rules of Civil Procedure.26 Section 137(2) of the Courts of Justice Act provides that a Court may order that any document filed in a civil proceeding be treated as confidential, sealed and not form part of the public record.27 Similarly, Rule 30.11 empowers the Court to order that a relevant document be deposited for safe keeping with the Registrar, and thereafter the document shall not be inspected by any person except with leave of the Court.28
Protective orders can also be granted by the Federal Court with respect to methods or processes of manufacture of pharmaceutical drugs within the context of Notice of Compliance ("NOC") proceedings under the Patented Medicines (Notice of Compliance) Regulations.29 Where an applicant for a NOC wishes to rely on the previous issuance of a NOC to a subsisting patent holder, the question as to whether or not the making or marketing of the medicine under authority of the second NOC would infringe the patent rights of the earlier NOC must first be resolved.30 In order to resolve this issue, the applicant for the new NOC must disclose the relevant information with respect to the development and constituent elements of the medicine in question. In other words, it appears that it is the intention of the Regulations to make a patent holder fully aware of the grounds on which an applicant for a new NOC says that issuance of the new NOC will not lead to an infringement of an existing patent.31 In order to achieve this purpose an applicant for a NOC alleging a different process than the one used in an existing patent for the same medicine must make a comprehensive disclosure of the process used in creating the medicine.
Examples Where Protective Orders Have Been Granted
Protective orders are more routinely granted within the context of NOC proceedings than in other situations. Indeed, the Federal Court of Appeal has acknowledged that an applicant for a NOC alleging a different process than the one embodied in an existing patent cannot be expected to make a full disclosure without a protective order.32 Moreover, there is little, if any, public interest in knowing the scientific content of drug and device processes and the issuance of protective orders in NOC proceedings will rarely imperil the principle of open justice.33
The Federal Court of Appeal in AB Hassle discussed these issues. The question was whether certain affidavit evidence filed by a generic manufacturer was confidential and therefore subject to a previously issued protective order. The evidence consisted of expert opinion on the distinction between the proposed tablets under the new NOC and those disclosed in an existing patent. Decary J.A. discussed the reasons for granting protective orders and stated that "the perceived confidentiality of information is a cornerstone of the regulatory scheme set out in the in the Food and Drug Regulations and in the Patented Medicines (Notice of Compliance) Regulations."34 It was further held that the test for issuing a confidentiality order is one based on a subjective, but reasonably held belief that the order is warranted in the circumstances.
Protective Orders are issued much less frequently in product liability situations and there have been few decisions in the field of pharmaceuticals or medical devices. This is explained in part by the fact that in several provinces the law provides for an implied undertaking which precludes the parties and their counsel from revealing evidence and information obtained on discovery to third parties (with certain exceptions), or from making use of the information in a proceeding other than the one in which it was obtained.35 Several courts have held that the existence of the implied undertaking disentitles the party who has made the initial disclosure from obtaining a protective order since the implied undertaking is sufficient to protect the confidentiality interests.36
Nevertheless, situations arise where the deemed undertaking is insufficient to protect information that a party may be forced to disclose through the course of litigation. Such a situation arose recently in an ongoing product liability action defended by our firm.37 In their statement of claim the plaintiffs allege that the defendant DaimlerChrysler was negligent in failing to ensure that their Dodge Ram vehicle would withstand the forces involved in a violent collision, in failing to manufacture the Dodge Ram in accordance with proper safety standards and in failing to properly test the vehicle. During the course of discovery, the plaintiffs requested that DaimlerChrysler produce several pieces of information regarding the specific vehicle including crash studies, crush vehicle collapse studies, rollover studies and information downloaded from the "black box" on the vehicle.
DaimlerChrysler sought a confidentiality order to protect its confidential commercial information. The plaintiffs argued that the deemed undertaking in Rule 30.1.01(3) was sufficient protection and that the motion was premature. The judge disagreed, holding that the deemed undertaking was not a reasonable alternative measure, according to the principles set out in Sierra Club, and that "all manufacturers of motor vehicles are entitled to protection against the risk of their manufacturing secrets being disseminated". Moreover, competitors could cause irreparable harm if the trade secrets were in the public domain. The right to a fair trial would not be detrimentally affected since the information was so complex that the general public would be unlikely to understand it and thus the information would contribute little to the public interest in the search for the truth. Finally, the judge felt that the information had been accumulated with a reasonable expectation of being kept confidential.
The confidentiality order limited the dissemination of the information to the counsel for the parties and their employees, experts and consultants retained by counsel who adopted the terms of the order in writing and the Court dealing with the action. Upon final determination of the action, each party, if requested by the defendant DaimlerChrysler, will have to assemble and return all documentary material protected by the confidentiality order.
Similar reasoning can successfully be applied to drug and device liability actions. The development and manufacturing processes of drugs and medical devices are commercially sensitive and, if they were disseminated into the general public, could result in irreparable harm to the manufacturers. One can argue that, as is the case in NOC proceedings, there are no deleterious effects on the public interest as knowledge of the highly technical information would not benefit the general public. Indeed, the only members of the public that would benefit from this information being divulged would be pharmaceutical competitors. This divulgence is a real and substantial risk. In many instances, if a confidentiality order is denied, then in order to protect its commercial interests, the party in question may have to withhold the documents on the basis that they are privileged. The orders can be narrowly drafted so as not to allow the concealment of excessive amounts of information and in order to satisfy the "reasonable alternative measures" element of the Sierra test, as discussed above.
Subsequent Remedial Measures
Manufacturers continually strive for improvements in their products, from the point of view both safety and performance. In many incidents, such improvements will be the result of scientific advancement or normal competition in the marketplace, as opposed to specific defects of the prior version of the product. In other cases, however, the improvements may be a response to performance reports on existing products, including information regarding failures and accidents. It is not uncommon to find manufacturers altering their product design to remedy a situation that exposes users to risks of injury or death.38
Ontario courts have struggled for many years with whether and under what circumstances evidence commonly referred to as "subsequent remedial measures" can be admitted in court. On one hand, where such evidence is detrimental to the defence of negligence claims, manufacturers may be deterred from carrying out improvements that could prevent future harm. On the other hand, the evidence can be considered relevant to a number of negligence issues39 and thus should be admitted.
Courts have generally allowed plaintiffs to pursue subsequent remedial measure in discovery on the basis that the evidence is relevant or related to a matter in issue. However, courts have taken a more restrictive approach to its admittance at trial.40
The fact that a manufacturer implemented steps to enhance a product's safety might establish the existence of a specific danger posed by the product and the manufacturer's knowledge of design flaws. Yet this evidence is arguably irrelevant as to whether the manufacturer could have reasonably foreseen the injury suffered by the plaintiff, or whether the manufacturer had actual knowledge of the means to avoid the plaintiff's harm at the time of manufacture or sale. This evidence is also arguably irrelevant to the negligence issue; often a manufacturer's changes simply make an already safe produce even safer. As a result, many courts do not allow this evidence to be adduced to establish that a product may be somehow deficient before the changes were made.41
In Algoma Central Railway v. Herb Fraser and Associates Ltd.,42 the Divisional Court examined the admissibility of evidence of subsequent remedial measures at trial to determine the proper scope of questioning in discovery. This action arose out of a fire on a ship owned by the plaintiff while it was undergoing repairs by the defendant company. A fire broke out on a conveyor belt where the employees of the defendant had been working. The defendant employees admitted to knowing that the conveyor belt was flammable prior to the fire and that safety practices were required. The plaintiff claimed that the fire was the result of the defendant's failure to establish and follow proper welding and fire safety practices. A number of questions were objected to at the defendant's examination of discovery on the basis that they related to fire safety procedures adopted by the defendants after the fire. The court concluded that evidence of such precautions may be admissible in certain situations, for example, where it goes to the question of prior knowledge or to the question of feasibility. Although the matter of admissibility at trial and the weight to be attached to the evidence is for the trial judge to decide, the questions were permitted at the discovery stage where relevance is broader than at trial. The court disagreed with the premise that a manufacturer should not take any remedial reassures and risk further actions by subsequent injured persons rather than furnish some evidence which may or may not be prejudicial to its defence of an action.
For the evidence to be admissible at trial, courts must also consider whether the prejudicial effect of the evidence exceeds its probative value. It is possible that a jury would draw improper inferences from the subsequent remedial measures. In Meilleur v. U.N.I- Crete Canada Ltd., 43 the court held that the evidence of post-incident precautionary measures were not probative of negligence issue but could be relevant to establish that a party has prior knowledge of potential hazards. As a result, the evidence was admitted at trial for that limited purpose only.
The law remains unsettled in Ontario. The current trend appears to allow subsequent remedial measures evidence at trial only as probative of issues other than negligence.44 Similarly, Saskatchewan courts generally will not admit the evidence for policy reasons, for fear of deterring defendants from taking remedial actions to prevent future harm.45 However, the courts in Manitoba have taken a fairly liberal approach and generally admit such evidence at trial for more extensive purposes. Manitoba courts have allowed evidence of subsequent remedial measures to establish the defendant's negligence on the basis that the evidence is relevant to the issue of negligence. For example, in a case where a school board changed its laboratory
practices after an explosion injured a student, the remedial evidence was admitted as proof of negligence.46 Other provinces follow a middle-ground approach. For example, evidence of remedial measures is admissible in Alberta courts if other evidence of negligence already exists. 47 British Columbia allows the evidence to be admitted as circumstantial evidence of negligence but not as an admission of negligence.48
Spoliation Of Evidence: The Concern And The Consequences
Spoliation is an American term, defined as "the intentional destruction, mutilation, alteration or concealment of evidence".49 The most recent Ontario case defined it as "the destruction or material alteration of evidence or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation".50 It occurs when the movement, change or destruction of evidence, or alteration of the scene, significantly impairs the opportunity of other interested parties to obtain the same evidentiary value from the evidence, as did any prior investigator. The concern with respect to drugs and medical devices is that there is notable challenge in preserving these products once failure and/or malfunction are alleged. Whether the situation involves a product liability issue or not, two competing and compelling considerations always exist in a spoliation case - the right to the plaintiff to have his or her day in court and the prejudice suffered by the defendant in having to defend the case without proper evidence.51 The question becomes, how does a court determine which consideration should predominate?
State of the Law in Canada
Over a century ago, the Supreme Court of Canada affirmed the English principle that spoliation of evidence raises an evidentiary presumption that the evidence was unfavourable to the party that destroyed it.52 The spoliating party may rebut this presumption, as was done in St. Louis. St. Louis entered into a supply contract with the Federal government for a construction project. The Crown refused to pay the balance owing, alleging, inter alia, that the pay-lists presented were fraudulently and improperly prepared and that the plaintiff had destroyed documents important in the determination of the issue. The Court held that the lower courts had incorrectly applied the spoliation presumption by holding that the destroyed documentary evidence was unfavourable to the plaintiff. The plaintiff was able to successfully rebut the inference by proving the value of the work performed under the contract through secondary evidence.
Courts have subsequently limited remedies for spoliation to procedural or evidentiary sanctions including the presumption referred to above in St. Louis, cost awards against the spoliating party, 53 contempt orders54 and revoking or suspending a party's right to examination for discovery. Courts will occasionally preclude the spoliating party from introducing expert evidence concerning testing on the missing product.55 Three main lines of cases dealing with spoliation have developed as a result in Canada:
- Cases where sanctions for spoliation have been granted
- Cases addressing the possibility of an independent tort of spoliation
- Cases where the spoliating party was ordered to produce all relevant documents
An order for sanctions has been the method most frequently resorted to while an order to produce all relevant documents is gaining some popularity.
The Tort of Spoliation
Tort law, as contrasted with procedural remedies, seeks to compensate victims and deter wrongdoers by awarding damages. The idea of a separate tort for spoliation, that is, the possibility of finding liability upon and awarding damages against a spoliator, was rejected in Canada until fairly recently.
The appropriateness of an independent tort for spoliation was first canvassed by the British Columbia Court of Appeal in Endean v. Canadian Red Cross Society. 56 This action concerned the claims of several British Columbia residents who were infected with the Hepatitis C virus as a result of blood transfusions. Included in the plaintiffs' pleadings was a claim for the intentional destruction of tapes and verbatim transcripts of meetings of the Canada Blood Committee (the "CBC"), a federal-provincial committee of senior civil servants who were involved in national blood policy and funding of the Red Cross blood program. The plaintiffs sought damages for this spoliation of evidence, rather than procedural sanctions. At trial, the plaintiffs were allowed to proceed with their cause of action in spoliation, and the defendants appealed.
The B.C. Court of Appeal looked to the St. Louis case as the seminal spoliation decision and held that St. Louis established the principle that the destruction of evidence is an evidentiary rule, which only raises a presumption, and not an independent tort. Accordingly, the Court held that St. Louis precluded the recognition of a tort in spoliation in Canada. Yet in St. Louis, the Supreme Court was not called upon to determine whether a cause of action for intentional spoliation could be pleaded. As noted in the more recent decision of Spasic v. Imperial Tobacco57, which is discussed below, while the Supreme Court simply found that the lower court had incorrectly applied the spoliation presumption, it did not state that the existence of the presumption precluded the creation of a separate tort of spoliation. Nevertheless, in Endean, the Judge felt that the imposition of tort consequences could have the effect of creating an inflexible rule which deprives the spoliator of an opportunity to rebut the claim against it, with the possible result that the spoliator would be punished by an award of damages for an injury which may not, in fact have been sustained.
In two significant decisions occurring shortly after Endean,58 the Courts took a different approach and demonstrated a move towards the recognition of an independent tort in spoliation, taking Canada closer to the position of the courts of some U.S. states.59
In Spasic, a "tobacco liability" case, the plaintiff died of lung cancer in 1998, after smoking for a prolonged period of time. Before her death, she started a lawsuit against the defendant tobacco manufacturers alleging that the defendants negligently and deceitfully participated in a conspiracy to deceive the public about the effects and dangers of smoking. Her estate continued her claim. The plaintiff claimed additionally that the tobacco company had intentionally destroyed evidence and that as a result she had been deprived of the opportunity to properly and fully investigate and prove the facts upon which her claim was based.
The motions court judge, relying on other recent spoliation decisions, held that a separate cause of action for spoliation did not exist in Ontario.60 The Court of Appeal however, disagreed, holding that spoliation could give rise to a cause of action, but that it should only be considered if the plaintiff is able to establish that the destruction or suppression of evidence resulted in the inability of the plaintiff to establish or prove the other torts pleaded in the statement of claim. Although the Court did not definitively state that spoliation could always be a separate cause of action, the Court made it clear that there may be good reason to extend the law and allow such a separate tort. Nonetheless, the Court also expressed the view that such a question is for the trial judge to consider in light of all the relevant evidence. Unfortunately, leave to appeal was not granted by the Supreme Court of Canada.
The Robb case is also part of the tainted blood actions and involves facts similar to Endean. The plaintiffs claimed that the CBC was directed by the Ontario government to destroy evidence in an attempt to cover up any wrongdoing. The Court of Appeal allowed the claim for a separate tort, however, it held that there was no merit to the claim against the Ontario government since it did not have control over the members of the CBC. In so doing, the Court nevertheless indicated that with sufficient supporting evidence, a claim in spoliation could result in damages being awarded.
U.S. Case law
While the law regarding spoliation in Canada is still being developed and remains somewhat vague, spoliation of evidence has long been recognized in the United States as an action requiring sanctions or dismissal.61 Consequently, spoliation cases dealing with pharmaceutical drugs and medical devices have been much more common in the U.S. U.S. case law is not binding on our courts, however, it is regarded as persuasive in areas where the basic principles are similar. Several Canadian courts have looked to the U.S. for guidance in deciding which sanctions are appropriate and it is therefore instructive to examine a few such U.S. cases.
The remedies employed by the U.S. courts include discovery sanctions, application of evidentiary presumptions, independent tort actions, prosecution under criminal statutes relating to the obstruction of justice and granting summary judgment to the innocent party.62
The spoliator's conduct was sufficiently egregious and the prejudice to the opposing party was sufficiently severe to warrant granting summary judgment in Bowman v. American Med. Systems, Inc., a medical device liability case.63 The plaintiff was implanted with a Dynaflex self- contained Penile Prosthesis (the "Prosthesis") designed and manufactured by the defendant, American Medical Systems, Inc. The Prosthesis allegedly ceased to function normally almost one year after the implantation and broke on one side. The plaintiff underwent surgery to remove the Prosthesis but instructed the surgeon to safeguard it for testing. The plaintiff's counsel also wrote a letter to the surgeon asking that the Prosthesis be preserved. Nevertheless, the surgeon spoliated the device before it could be examined and the surgeon subsequently died. The defendant sought to dismiss the plaintiff's claims in strict liability, breach of warranty and negligence on the basis that it had been denied the opportunity to conduct its own investigations.
To determine the appropriate sanction for the obvious spoliation, the Court balanced three factors based on a test first elucidated in Schmid v. Milwaukee Elec. Tool Corp.64 The first factor was the degree of fault of the plaintiff. Even though the evidence was discarded by the surgeon and not by the plaintiff himself, the Court believed that the plaintiff still bore the responsibility for the spoliation. The second factor was the degree of prejudice suffered by the defendant. Here the Court held that the defendant was severely prejudiced given that that the entire Prosthesis had been destroyed and no examination of the device was ever conducted. It was impossible to determine whether the Prosthesis malfunctioned because of a design defect, a manufacturing defect or because of improper implantation of the device. The final factor was whether lesser sanctions would be more appropriate. A less onerous sanction was considered inadequate given the fact that the defendant had no evidence with which it could defend the action, nor could it examine the liability of the surgeon.
As a result of Spasic and Robb, Canadian courts appear to be moving towards the recognition of an independent cause of action for spoliation. The tort of spoliation will be a matter for the trial judge to determine in the context of a complete record and after hearing the evidence in its entirety. 65 For manufacturers of drugs and medical devices, it is important to make every attempt to preserve the evidence once you become aware of a potential liability claim. This means informing the plaintiff of the consequences of spoliation and endeavouring to inspect the evidence as soon as possible. Where it appears that is a risk of possible destruction or alteration of the evidence, it may be advisable to more for a protection order which will require the preservation of the evidence and set the parameters for the preservation, inspection and testing of the evidence.
U.S. Cross-Border Evidentiary Issues
Generally speaking, evidence gathering outside of actual discovery can be obtained in two ways:
- if it already exists in the public domain; and/or
- if it is voluntarily provided by a party or non-party.
Where neither of these two situations exists, litigants must seek discovery access. The abundance of product liability class actions in the United States has served to develop a trend whereby Canadian litigants are seeking discovery access in the United States in cases involving the same product. The ongoing litigation over the price-fixing of vitamins provides a good example for discussion of this trend.
Several class actions were commenced in Ontario on behalf of the same putative class members.66 Each class asserted that various combinations of defendants entered into conspiracies to fix prices and lessen competition with respect to the distribution and sale of vitamins. The plaintiffs representing two of the Ontario class actions and those representing the British Columbia class action (the "moving plaintiffs") moved to intervene in the United States' vitamin price-fixing litigation67 to obtain discovery evidence given by defendants in that action. Some of the defendants in turn sought an order requiring the plaintiffs to discontinue their motion before the American court.68
The U.S. litigation is governed in part by a protective order. The moving plaintiffs brought a motion in the U.S. litigation seeking modification of the protective order and access to the discovery of certain defendants (the "U.S. motion"). The plaintiffs argued that the purpose of the U.S. motion was to obtain evidence in support of their claims in the Canadian proceedings and relied on the principle of international comity. The defendants submitted that such a motion was inconsistent with the Class Proceedings Act, 1992.69
The Superior Court dismissed the defendants' motion,70 which was then appealed to the Divisional Court. 71 In the interim, U.S. District Judge Hogan, who was presiding over the U.S. litigation, heard the U.S. motion. Judge Hogan held that the plaintiffs met the criteria for permissive intervention but deferred ruling on the motion until the appeals process in the Canadian courts had been exhausted or otherwise concluded.
Mr. Justice Farley of the Divisional Court considered there to be a distinction between access to discovery evidence in a "passive sense" versus access in an "active sense". Access in the passive sense refers to merely looking at that which has been produced in the ordinary course of the litigation.72 Discovery in this sense would not conflict with the established principles of gathering evidence in a foreign jurisdiction and the right to privacy. Conversely, discovery access in the active sense referred to asking U.S. counsel to pursue avenues they would not otherwise have pursued for the purpose of assisting the Canadian plaintiffs.73 This type of discovery was barred since the plaintiffs would be engaging in discovery prior to the time that they were entitled to under the Rules of Civil Procedure. Nevertheless, if the plaintiffs did engage in active discovery in the U.S., it would still be up to the Canadian court to determine whether this evidence was admissible at trial.
In this instance, it was held that the plaintiffs were merely asking for discovery in the passive sense. They asked for a relaxation of the Protective Order to allow them to review information which had already been discovered in the ordinary course of the U.S. litigation.
The decision was subsequently appealed to the Ontario Court of Appeal, who just recently released its decision. 74 The Court substantially agreed with Mr. Justice Cumming of the Superior Court and refused to enjoin the plaintiffs from pursuing their motion in the U.S. The proper characterization of what the plaintiffs are attempting to do is, "to gather evidence in a foreign jurisdiction in accordance with the rules of that jurisdiction."75 By considering the situation in the absence of a protective order, the Court found that one could not characterize the plaintiff's actions as discovery in the "active sense" since the productions would be "freely available and no complaint could be made if the respondents sought them out".76 In the end, it would be up to Judge Hogan to determine the extent to which the protective order governing the evidence in the U.S. should be varied to allow the Canadian plaintiff's access to that information. At that point, a Canadian court could then grant an order of a similar nature.
With the trend towards transnational litigation exploding in recent years, the decision of the Court of Appeal arguably raises the concern that Canadian plaintiffs will now routinely seek discovery in the U.S. and that it will be up to the U.S. judges exclusively to determine the extent of that discovery. This is an important consideration for companies with subsidiaries or parents in the U.S.
AcknowledgmentPresented at: National Forum on Drug and Medical Device Liability
© 2003 Cassels Brock & Blackwell LLP. All rights reserved
1General Accident Assurance Company v. Chrusz (1999), 45 O.R. (3d) 321 (Ont. C.A.) [hereinafter, Chrusz].
2Ibid., at 331.
4M.L. Waddell, "Litigation privilege and the expert: In the aftermath of Chrusz" (2001) 20 Advocates' Soc. J. 10.
5Made under the Courts of Justice Act, R.R.O. 1990, Reg. 194, as amended.
6Chrusz, supra note 1 at 333.
7R.P. Manes & M.P. Silver, Solicitor-Client Privilege in Canadian Law (Toronto: Butterworths, 1993) at 93, 106.
8For example, see the discussion by Carthy J.A. in Chrusz, supra note 1 at 334-335.
9Chrusz, supra note 1 at 348.
10Ibid., at 347.
11Chrusz, supra note 1 at 356-357.
12P. Y. Atkinson, "Product Obligations: The Narrowed Scope of Work Product Privilege" (1994) 13 Advocates' Soc. J. 6.
13P.J. Pliszka, "How to get and keep solicitor-client privilege: Tips for in-house counsel" (1997) 6 Canadian Corporate Counsel 114.
14R.P. Manes & M.P. Silver, supra note 7 at 187-189.
15Ibid., at 189, 191.
16Ibid., at 192, 194.
17Ibid., at 196.
18Ibid., at 197.
19Enterprise Excellence Corp. v. Royal Bank,  O.J. No. 5185 (Ont. S.C.J.)
20Sierra Club of Canada v. Canada (Minister of Finance) (2002), 211 D.L.R. (4th) 193 (S.C.C.), at 197. [hereinafter Sierra Club]. See also Canadian Broadcasting Corp. v. New Brunswick (Attorney General),  3 S.C.R. 480.
21Apotex Inc. v. Wellcome Foundation Ltd. (1993), 51 C.P.R. (3d) 305 (F.C.T.D.), [hereinafter Apotex].
22The Courts use the terms "protective order" and "confidentiality order" interchangeably.
23Supra, note 1 at 211.
24Ibid at 211-212.
25R.S.O. 1990, c. C.43, as amended.
26R.R.O. 1990, Reg. 194, as amended.
27See for example Haessler-DeWay Ltd. v. Color Tech. Inc. (1985), 49 C.P.C. 156 (Ont. Dist. Ct.).
28See for example BASF Canada Inc. v. Max Auto Supply (1986) Inc. (1999), 30 C.P.C. (4th) 23, (Ont. Master) and Amer.-Can. Dev. Corp. Ltd. v. Tele Time Saver Inc. (1976), 1 C.P.C. 230, (Ont. H.C.).
29SOR/93-133, [hereinafter, the Regulations].
30Ibid, s. 5.
31Bayer AG v. Canada (Minister of National Health and Welfare) (1993), 51 C.P.R. (3d) 329 (F.C.A.) at pp. 337-338.
33AB Hassle v. Canada (Minister of National Health and Welfare) (C.A.)  3 F.C. 360 (F.C. C.A.), [hereinafter AB Hassle].
34Ibid. at 366.
35The Ontario Court of Appeal in Goodman v. Rossi (1995), 24 O.R. (3d) 359 determined that the implied undertaking rule existed at common law and that it should be embodied in the Rules of Civil Procedure, which subsequently occurred (see Rule of Civil Procedure, R.R.O. 1990, Reg. 194, as am., Rule 30.1.01). The Court also noted that all jurisdictions in Canada that have considered this doctrine have decided in favour of the implied undertaking rule and cited several cases including: Hunt v. Atlas Turner Inc. (1995), 4 B.C.L.R. (3d) 110 (B.C. C.A.); Wirth Ltd. v. Acadia Pipce & Supply Corp. (1991), 50 C.P.C. (2d) 273 (Alta. Q.B.); Blake v. Hudson's Bay Co. (1987), 22 C.P.C. (2d) 95 (Man. Q.B.); and Agnew v. Dow Chemical Co. (1991), 1 C.P.C. (3d) 264 (N.B. Q.B.).
36See for example Canada v. ICHI Canada Ltd.,  1 F.C. 571 (F.C. T.D.) and Hanson v. Keystone Ford Sales Ltd. (1996), 49 C.P.C. (3d) 1 (Man. C.A.).
37Minichiello et. al. v. DaimlerChrysler Corporation et. al. (2003), unreported.
38L. G. Theall et al., Product Liability: Canadian Law and Practice (Canada Law Books Inc., 2002) (Release No. 1. December 2002) at L8-10.
39Ibid, at L8-10.
40Supra note 1 at L8-9 - L8-10.
41Supra note 1 at L8-11.
42(1988), 66 O.R. (3d) 346 (Div. Ct.).
43(1982), 30 C.P.C. 80 (Ont. H.C.).
44Supra note 1 at L8-12 - L8-13
See Cominco Ltd. v. Phillips Cables Ltd.,  3 W.W.R. 562 (Sask. C.A.); McKay v. Saskatoon (City) (1960), 26 D.L.R. (3d) 506 (Sask. C.A.).
46James v. River east School Division No. 9 (1975), 64 D.L.R. (3d) 338 (Man. C.A.).
47See Toll v. Canadian Pacific Railway Co. v. Calgary (1966), 59 D.L.R. (2d) 642 (Alta. C.A.).
48See Anderson v. Maple Ridge (District),  1 W.W.R. 172 (B.C.C.A.), leave to appeal to S.C.C. refused,  1 S.C.R. vi.
49Black's Law Dictionaryy 7th ed., s.v. "spoliation".
50Cheung v. Toyota Canada Inc. ,  O.J. No. 411 (Ont. S.C.J.) (QL), [hereinafter Toyota].
51C.B. Major, "Where's the Evidence? Dealing With Spoliation by Plaintiffs in Product Liability Cases" (2002) 53 S.C.L. Rev. 415.
52St. Louis v. The Queen (1894), 25 S.C.R. 649; rev'g (1894), 4 Ex. C.R. 185; [hereinafter St. Louis].
53See Farro et al. v. Nutone Electrical Ltd. et al. (1990) 40 O.A.C. 233 (Ont. C.A.); rev'g (1990) 72 O.R. (2d) 637 (Ont. Gen. Div.).
54See Werner v. Warnder Auto-Marine Inc.,  O.J. No. 1341 (Ont. Gen. Div.); rev'd (1996), 3 C.P.C. (4th) 110 (Ont. C.A.); [hereinafter Werner].
55See Dawes v. Jajcaj,  B.C.J. No. 845 (B.C.C.A.); rev'g [1995 B.C.J. NO. 2284 (B.C. S.C.); leave to appeal denied  S.C.C.A. No. 347; Toyota, supra note 20.
56Endean v. Canadian Red Cross Society (1998), 157 D.L.R. (4th) 465 (B.C. C.A.); rev'g in part (1997), 148 D.L.R. (4th) 158 (B.C. S.C.); leave to appeal granted,  S.C.C.A. No. 260 (S.C.C.); [hereinafter Endean].
57Spasic v. Imperial Tobacco (2000), 49 O.R. (3d) 699 (Ont. C.A.); rev'g (1998) 42 O.R. (3d) 391 (Ont. Gen. Div.); leave to appeal denied  S.C.C.A. No. 547 (S.C.C.); [hereinafter Spasic].
58Ibid and Robb Estate v. Canadian Red Cross Society (2001), 152 O.A.C. 60 (Ont. C.A.); rev'g in part  O.T.C. 23 (Ont. S.C.J.); rev'g in part (1998) 64 O.T.C. 161 (Ont. Gen. Div.); leave to appeal denied  S.C.C.A. No. 44 (S.C.C.); [hereinafter Robb].
59In the United States, several jurisdictions have recognized spoliation as distinct tort based on either negligence or intentional misconduct. See L. Kindel and K. Richter, "Spoliation of Evidence: Will The New Millenium See A Further Expansion of Sanctions For The Improper Destruction of Evidence?" (2000) 27 Wm. Mitchell L. Rev. 687.
60Supra, note 27, Ont. Gen. Div.
61For e.g. see Shimanovsky v. General Motors Corp., 692 N.E.2d 286 (Ill. Supreme Court 1998) [hereinafter Shimanovsky]; Dillon v. Nissan Motor Co., 986 F.2d 263 (8th Cir. 1993); Sentry Insurance Co. v. Royal Insurance Co. of America, 539 N.W.2d 911 (Wis.App. 1995).
62Supra, note 29.
63Bowman v. American Med. Systems, Inc., 1998 WL 721079 (E.D. Pa. 1998).
54Schmid v. Milwaukee Elec. Tool Corp., 13 R.3d 76, 78 (3d Cir. 1994).
65This was recently confirmed in Nunes v. Air Transat A.T. Inc.,  O.J. No. 4708 (Ont. S.C.J.) where, on a motion to strike portions of the Statement of Claim pleading the tort of spoliation, the court adopted the reasoning in Spasic and held that this was not an issue properly decided on a motion.
66Vitapharm Canada Ltd. v. F. Hoffman-La Roche Ltd. (2000) 48 O.R. (3d) 21 (Ont.S.C.J.) and (2000) 4 C.P.C. (5th) 169 . Through these two motions the actions were reconstituted into seven class actions and all are to be heard in Toronto with a lead counsel appointed for the Plaintiff's. As a result of the reconstitution, four other Ontario class actions were stayed. The current Ontario class actions seek certification for national classes, covering all Canadians other than those plaintiffs involved in British Columbia and Quebec class actions.
67Vitamins Anti-Trust Litigation, (2002) MDL No. 1285; [hereinafter U.S. litigation].
58Vitapharm Canada Ltd. v. F. Hoffman-La Roche Ltd. (2001) 6 C.P.C. (5th) 245 (Ont.S.C.J.).
69S.O. 1992, c.6.
70Supra, note 11.
71Vitapharm Canada Ltd. v. F. Hoffman-La Roche Ltd. (2000) 212 D.L.R. (4th) 563 (Ont. Div. Ct.).
72Ibid at 575.
73Ibid at 573.
74Ford v. F. Hoffman-La Roche Ltd.,  O.J. No. 868 (Ont. C.A.) (QL).
75Ibid para 4.
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