Tampering with the Evidence

After an incident, injury or occurrence that will possibly lead to a claim, potential parties to that claim are faced with the dilemma of what to do with the potentially relevant evidence. Should it be moved? Where should it be stored? Can it be taken apart? Should anyone be called before evidence is disturbed? The legal principle of spoliation applies in such circumstances.

WHAT IS SPOLIATION?

A finding that spoliation has occurred can result in court sanctions where the movement, change or destruction of evidence – or the alteration of a scene, for example – impairs the opportunity of other interested parties to test, view or otherwise make use of the evidence. It is rooted in the principle that a fair trial necessitates that all parties have full access to all relevant information.

Where it is demonstrated that a party has spoliated evidence, the court will, in some cases, impose sanctions for that conduct. The most common of these sanctions is to impose an evidentiary presumption that the destroyed evidence would have been unfavourable to the party responsible for its destruction. It is important to note this negative presumption can be rebutted where independent evidence exists to the contrary.

Where physical evidence has been destroyed, and the opposing party hasn’t been given the opportunity to inspect or test that evidence, the court can also preclude the admission of expert reports or testimony relating to that evidence. Other sanctions include costs orders against the spoliating party and even the potential dismissal of a claim.

Recently, Canadian courts opened up the possibility of an independent tort of spoliation. This broadens the principle to include not only the sanctions discussed above, but also an independent cause of action and monetary damages for spoliation.

Whether or not sanctions will be imposed – and what those sanctions will be – depend upon a variety of factors. Sanctions are infrequently imposed, for example, when the destruction or inference with evidence is not intentional. Even in such cases, however, sanctions are possible if the prejudice to the other party is great, or if the spoliation resulted from bad faith dealings – even if those bad faith dealings don’t amount to intentional destruction. The purpose of having sanctions imposed on an opposing party in litigation is to:

* Prove evidence has been altered or destroyed,

* Prove you have suffered prejudice as a result, and

* Demonstrate the sanctions you propose will correct or address that prejudice.

SPOLIATION AND ELECTRONIC EVIDENCE

Spoliation principles have traditionally been applied to physical evidence such as allegedly defective machinery, cars involved in accidents or paper files allegedly shredded by an opposing party. However, it is important that parties and potential parties to litigation recognize the rules of evidence are broad enough to include all manner of electronic data that could potentially be relevant in litigation. This can include e-mails, back-up tapes, electronic versions of documents and embedded information about a document electronically recorded by computers and servers.

Two recent American cases have highlighted that the principle of spoliation applies to electronic evidence; in addition, the cases have examined the potentially significant implications of that.

In Zubulake v. UBS Warburg, a court found that relevant e-mails and other relevant electronic evidence relating to a gender discrimination claim against a former employer had been destroyed. A punitive damages award of $20 million was ultimately made against the defendant.

Similarly, in Coleman v. Morgan Stanley, the defendant failed to advise the plaintiff of back-up tapes and other electronic documents relevant to the fraud and conspiracy claim against it. The defendant was ultimately found to have acted in bad faith and to have knowingly and deliberately failed in its duty to preserve and produce e-mails. In that case, a punitive damages award of $850 million was made (the case is under appeal).

It is important to keep in mind these American cases are extreme examples. The American judicial regime is very different from the Canadian one, particularly in terms of damages. Nevertheless, these cases illustrate – albeit in a different legal context – the importance of preserving evidence, whether electronic or otherwise, as soon as litigation is reasonably anticipated.

In the Canadian context, courts are becoming increasingly aware of the importance of preserving electronic evidence. Ontario, for example, recently implemented E-Discovery Guidelines, setting out guiding principles that should be followed in preserving, handling and sharing electronic evidence.

AVOIDING SPOLIATION

The keys to avoiding the spoliation of evidence, whether in one’s own hands or in the hands of an opposing party, are to locate the evidence, preserve the evidence and document the handling and chain of ownership of evidence.

As a defendant or potential defendant to litigation, steps can be taken to avoid spoliation by the plaintiff. In particular, contact with the plaintiff should be made early – either directly or through counsel – to identify any concerns with respect to the preservation of evidence. If necessary, a “preservation order” can be sought from the courts. Preservation orders specifically identify potentially relevant evidence and outline the parameters for the preservation, inspection and testing of that evidence. Once a preservation order is obtained, courts are much more likely to impose sanctions for any spoliation that subsequently takes place.

Every attempt should be made to inspect the evidence as soon as possible, as well as to perform any necessary testing or inspections. Where possible, and particularly with respect to physical evidence, careful notes as well as documentation by photography and videotape should be made. Ultimately, the best defence is not to be forced to rely on the defence of spoliation. It is easier to prevent prejudice in the first place, by taking some of the above-mentioned measures, than to establish prejudice later on. Spoliation-based arguments are inherently risky because the law in Canada is inconsistently applied.

It is crucial that as a party or potential party to litigation, you ensure appropriate measures are taken to protect relevant evidence in your own possession. The first step is to institute an organization-wide document hold on both hard copy and electronic documents as soon as you become aware of litigation or a situation that could potentially lead to litigation. This is critical in order to avoid the destruction of relevant evidence through ordinary document management systems, office clean-up and employee oversight. Document holds should comprehensively outline material subject to the hold and explicitly outline what may and may not be done with those documents. Document holds should be communicated to employees as well as to any third-party service providers such as labs, experts, testing facilities and off-site storage sites.

To the extent there is relevant physical evidence in your possession, careful efforts should be made to preserve that evidence in its original state. It is often a good idea to document the condition of the physical evidence as early as possible by means of photographs or videotape to document the chain of custody of the evidence. If you will be doing any testing of the evidence, particularly destructive testing, the plaintiff should be made aware of this and, if appropriate, given an opportunity to participate. These requirements should be carefully communicated to any experts involved in the case.