Date: 19990812
Docket: T-1096-95
BETWEEN:
ANDERSEN CONSULTING
Plaintiff
- and -
HER MAJESTY THE QUEEN
Defendant
REASONS FOR ORDER
(Delivered orally on the Bench at Ottawa, Ontario
Wednesday, August 11, 1999)
HUGESSEN J.
[1] I have before me a motion by the plaintiff which alleges breach by the defendant of an early neutral evaluation agreement entered into between the parties. That agreement provided for an early neutral evaluation and mediation by a retired judge of the Superior Court of Ontario. In the course of that process, the parties exchanged a number of documents and particularly certain draft expert reports.
[2] The agreement deals with the status of the documents exchanged in very specific terms as follows:
| "5.1 By signing this Agreement, the parties indicate their awareness of the fact any statement made, information provided and materials prepared for the neutral evaluation and mediation (that cannot be obtained from any other source) are confidential and privileged. |
| 5.2 Statements made and documents produced, including any draft expert report and any report of the Evaluator, which are not otherwise discoverable, shall not be subject to disclosure through discovery or any other process and shall not be admissible into evidence for any purpose, including impeaching credibility. Evidence that is independently admissible or discoverable shall not be rendered inadmissible or non-discoverable by virtue of its use during the neutral evaluation or mediation." |
[3] Pursuant to the agreement, the plaintiff delivered to the defendant a number of draft expert reports; each of those reports contained at the front a warning expressed in these terms:
| "This report can be used only in connection with the neutral evaluation to be conducted in connection with this matter and cannot be used in connection with any other current or future action related to this dispute." |
It is now an accepted fact that the defendant revealed the actual text of the draft expert reports delivered by the plaintiff to its own experts for the purposes of the latter preparing their reports for use in this litigation.
[4] In my view, this is a clear and egregious breach of the terms of the early neutral evaluation agreement. I can think of few words clearer than those found in Article 5 above. The documents exchanged are to be confidential and privileged. Those are not words of mystery; they are clear and their meaning is known to every lawyer. What is delivered in confidence for a purpose may only be used for that purpose. As was said by Mr. Justice La Forest in the Lac Minerals case1, "any use other than a permitted use is prohibited and amounts to a breach of duty".
[5] The terms of the disclaimer at the beginning of the reports only goes to reinforce the status of those documents as being confidential, that is to say, not to be revealed. We are not here talking about ideas or about positions which may have been developed or were developing in the course of an alternate dispute resolution proceeding. We are talking about the concrete expression of those ideas in documents delivered specifically for the purpose of the alternate dispute resolution. The word "confidential" as it appear in Article 5.1 of the Agreement echos the word that we find in Rule 388 of the Federal Court Rules, 1998.
[6] It is a policy of the Court to encourage dispute resolution and to encourage parties to attempt to resolve their differences. As a part of that policy, the Court protects communications made for the purpose of alternate dispute resolution. These communications were made specifically for the purpose of alternate dispute resolution and should not have been revealed to persons who were not entitled to see them. The expert witnesses that the defendant proposes to call at trial were not parties to the early neutral evaluation, did not appear in the context of the early neutral evaluation and were not entitled to see those documents.
[7] That said, I do not think that the prejudice suffered by the plaintiff is as great as they would make it out to be. In fact, those same experts whose draft reports were communicated to the defendant in confidence in December of 1998, have now signed final reports which were served upon the defendant in August of 1999. I am told that the trial reports differ only slightly from the draft reports. The only material advantage that the defendant has obtained from its misuse of the documents given to it in confidence is that its experts have had a longer period of time to cogitate upon what they should say in response to the plaintiff"s positions.
[8] In its motion, the plaintiff seeks a number of remedies and some alternative remedies. In the first instance, it seeks a remedy of a declaration which I think would be inappropriate to give in the context of a motion of this sort, although the present Reasons should serve whatever purpose that the plaintiff thinks may be served by such a declaration. It then seeks in effect to disqualify the defendant"s experts from filing reports or from testifying at the trial which is scheduled to begin in less than 2 months time. I consider that a remedy of that sort would be entirely disproportionate to the nature of the sins committed by the defendant.
[9] As an alternative, the plaintiff asks to open the whole early neutral evaluation procedure to the light of day so that it, the plaintiff, may make use of the report by the evaluator. That would also be a disproportionate remedy in the circumstances and I would think that the remedy was far worse than the evil committed.
[10] I do however think that the conclusions found in paragraphs ii and iii of the plaintiff"s motion are appropriate. Those conclusions seek an order that the defendant"s reports which were served on the plaintiff on August 5th 1999, shall be treated as reply reports so that the defendant shall be foreclosed from any right to file further reply reports in response to the plaintiff"s expert reports. They also seek an order permitting the plaintiff to file reply reports of its own in response to the defendant"s expert reports by September 15th 1999.
| [11] Those two conclusions are, in my view, appropriate. |
[12] There are a number of other prayers in the motion which I think are inappropriate, going as they do to the ultimate order for costs which may or may not be made by the judge at the conclusion of the trial.
COSTS
[13] In my view, the character of the defendant"s breach is, as I already said, egregious, although not in bad faith, I think that an order for costs on a solicitor/client scale would be appropriate. It is my general practice in matters of this sort to make a specific order for a lump sum. There will be an order for costs in the amount of $20,000.00 payable forthwith and in any event of the cause. Pursuant to Rule 394, the plaintiff is asked to prepare an order giving effect to these Reasons and to make a motion which may be by consent or otherwise returnable before me on Wednesday, August 18, 1999 at 14:30.
James K. Hugessen
Judge
__________________1 Lac Minerals Ltd. v.International Corona Resources Ltd., [1989] 2 S.C.R. 574 at 642.