In January, the Federal Court of Canada set aside document-production orders issued to the Competition Bureau under section 11 of the Competition Act in connection with the Bureau’s review of the Labatt/Lakeport merger. Recent media reports have focused on the implications of the decision for the Bureau, its internal procedures and the reputation of its senior management. But the decision also highlights the Bureau’s regular use of production orders in merger, cartel and other investigations.
The cost implications of section 11 orders for Canadian businesses are significant. Labatt is reported to have spent more than $750,000 to respond to an earlier order in the Labatt/Lakeport review. In some cases, compliance costs can be much higher. Implementing a comprehensive document retention policy (DRP) can be a low-cost proactive way to lower the potentially high costs of court-ordered document production. DRPs are also an essential component of any company’s litigation preparedness planning.
DRPs establish guidelines regarding the organization, management and retention of documents and electronic records on the basis of statutory obligations to retain certain classes of documents, business need and protection against future litigation.
The flip side of retention is destruction: DRPs also provide for the systematic destruction of documents on expiry of statutory and discretionary minimum retention periods. Documents that have no further value to an organization but that remain in the “pool of documents” that must be reviewed as part of the document-production process can greatly increase document-production costs. Examples include electronic documents (such as emails) that, while of no probative value, may “technically” be responsive to broadly worded production orders and that, in many organizations, can number in the thousands or millions of pages over multiyear periods. Destroying these documents on an ad hoc basis – particularly in advance of a likely regulatory review or litigation – can raise serious suspicions. Properly implemented and applied, a DRP can eliminate the basis for these suspicions in a manner that will also reduce compliance costs.