More on Privacy Rights, Compelled Disclosure and the Implied Undertaking of Confidentiality

Further to my previous posts on this topic, when people sue (or are sued) in the BC Supreme Court the Rules force disclosure of certain facts and documents.  To balance the parties privacy interests the Courts have developed an “implied undertaking of confidentiality” which is basically a judge made rule that “requires a party to civil litigation to keep confidential all information disclosed by adverse parties in the litigation under the compulsion of discovery procedures.  The receiving party is only to use the disclosed information in the litigation in which it was produced”
The implied undertaking can be lifted by an order of the Court or by consent of the party that disclosed the information.  Another way the implied undertaking can come to an end is if the case goes to “open court”.   The question is when is the open court exception triggered.  As most lawyers know most cases don’t go to trial but it is common to have pre-trial applications held in open court.  In such a case is the exception triggered?  Reasons for judgement were released today dealing with this novel issue.
In today’s case (Bodnar v. The Cash Store inc.) the Plaintiff’s were involved in a lawsuit.  During the course of that claim a pre-trial motion was brought which relied, in part, on documents produced by the Defendant by the compulsion of the forced disclosure under the Rules of Court.  The case ultimately settled and a different class of Plaintiff’s brought a “virtually identical” lawsuit.
The Plaintiff’s wished to use the materials obtained in the first lawsuit in the second claim.  The Defendant’s would not consent arguing that the implied undertaking of confidentiality prohibited this use.  The Court was asked whether having the documents used in a pre-trial chambers application triggered the open court exception.  Madam Justice Griffin provided the following useful analysis:

[45] I conclude that a proper balancing of the public interest involved in the implied undertaking rule and in the open court principle, in respect of information filed in court as part of an interim application, can best be achieved by applying the following principles:

(a) the implied undertaking does not end when information, produced by an adverse party under compulsion of discovery (the “Producing Party”), is filed in court by the receiving party (the “Receiving Party”) in support of an interim application;

(b) in considering a Receiving Party’s application for leave to be relieved from the implied undertaking, the court may consider, as one factor in support of leave, the fact that the information was filed in court for a legitimate purpose and became part of the court record; and

(c) the implied undertaking of a Receiving Party ends, with respect to information produced by the Producing Party, when that information is filed in court by the Producing Party itself.

[46] The above principles would seek to avoid the mischief of a party with ulterior motives filing the adverse party’s information in court simply to get around the implied undertaking.  Upholding the implied undertaking and placing the onus on the Receiving Party to seek the court’s leave before using the information for another purpose, would encourage parties to fulfill their discovery obligations knowing that the implied undertaking cannot easily be avoided.   At the same time, the fact that the documents are now part of the court record, available to all other persons, will be one important factor to be considered by the court on a Receiving Party’s subsequent application for leave to use the documents for other purposes.

[47] It makes sense however, that the implied undertaking is lost when the Producing Party files its own information in open court.  There can be no concern about abuse of process or a deliberate attempt to circumvent the implied undertaking rule in such a situation, given that the Producing Party is not under any undertaking with respect to its own information and was not compelled to produce it in court.

The Court went on to hold that, despite the implied undertaking not coming to an end by virtue of the documents use in court, it would be appropriate to permit the Plaintiff’s to use the information in the subsequent lawsuit.  This case is worth reviewing in full for anyone interested in the developing principles of privacy law in BC as the judgement contains a lengthy discussion of the principles at play and the relevant precedents addressing the “implied undertaking of confidentiality”.