Protective Orders Over Productions: A Review of Recent Caselaw

By Caroline Bedard of Merovitz Potechin LLP on Monday November 11, 2024.

Presumptively, parties have the right 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.

In such cases, a party may request the court to issue a protective order to control access to sensitive information and prevent its public disclosure. Courts most often grant protective orders in disputes involving intellectual property or in commercial disputes.

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. A party requesting a protective order and a party challenging its propriety both find it useful.

Case Study: Protective Orders in Sinopoli v. General Motors Company (2021 ONSC 244)

The Facts

The case of Sinopoli involved an allegedly defective ignition switch in a vehicle that General Motors (“GM”) designed and sold, which was part of 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.

Relevant Factors

The court outlined the following factors to consider when deciding whether to grant a protective order:

1. The “open court” principle is a “cornerstone of the common law” and is a principle not of convenience but of necessity.
2. 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.
3. 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.
4. The court does have jurisdiction to grant a protective order in circumstances where unlimited production will prejudice a party.
5. 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.
6. Overbroad and blanket orders should be avoided, particularly where applied to hypothetical situations as opposed to actual documents and actual circumstances.
7. A party must demonstrate a real and substantial risk of harm to obtain a protective order. Speculation is not sufficient.  An adequate factual basis must be provided.

In the Commercial Context: Lessons from Edgetech HVAC Services Ltd. v. Aneja (2022 ONSC 3360)

In the 2022 Ontario Superior Court decision, Edgetech HVAC Services Ltd. v. Aneja (2022 ONSC 3360), Edgetech could not demonstrate a real and substantial risk of serious financial harm if its competitor accessed its financial statements 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:

1. The court may issue a protective order if disclosing the information poses a risk of serious financial harm to a party.
2. 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.

3. Disclosing information that gives a competitor an unfair advantage justifies issuing a protective order.

When Is a Protective Order Appropriate?

Parties can use protective orders to shield their confidential information from the public domain during litigation effectively. 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.

Contact Us

If you have questions about protective orders, document disclosure, or how these legal principles may impact your case, please reach out to us. Our experienced Litigation Team is here to provide clarity and guide you through the complexities of protecting sensitive information during the litigation process.