During the execution of a civil search order (or Anton Piller) one of the duties of the supervising solicitor is to list documents found during the search. Another function is to distinguish privileged documents found during the search and to prevent them being passed to the successful applicant or his solicitors. Depending on the scope of the search order (I mean the scope of what may be treated as relevant material, and so subject to seizure and / or copying), the supervising solicitor may also need to consider in the case of each document whether it is relevant.

This is all well and good when going through the files of a small business. But doing the same with a modern computer can be a daunting task. A computer may contain multiple copies and drafts of thousands of documents (and still more material if a computer expert is involved who can recover deleted files). It may contain a huge number of emails in a single file, some of them privileged, and many clearly irrelevant.

There are firms of solicitors who can discharge the duties of a supervising solicitor in a manner which is professional, and compliant with the rules. They are experienced, and no doubt expensive. But the complexity of dealing with the contents of a hard disk drive (or several hard disks) which may have been accumulating files for years is such that the danger of things going wrong is considerable.

It is not only a possible breach of privilege which is at stake. Executing a search order is a psychological blow to the respondent which can bring a major advantage in litigation. If the respondent can set aside, or in some lesser manner, undermine the order or its execution in some way, that is a psychological blow in return against the applicant.

The mis-handling of computer files, leading to the respondents getting access to privileged documents, led to just such a counter attack in a recent Canadian case. Three years after the search order was executed (in June 2003), on third appeal, the respondent's application to discharge the applicant's solicitors, on the grounds they had had access to privileged computer files copied during the search, reached the Supreme Court of Canada. One can imagine that the applicants (who are the plaintiffs) might be finding the litigation an uphill battle! The application to discharge the applicant's solicitors was refused at first instance, allowed on appeal, refused on further appeal, and allowed again in the Supreme Court. There is one judgement, the other members of the court all concurring.

The case is interesting because it highlights the practical difficulties of handling large amounts of computer data during a search order. The legal point is turns on is the rather different issue of what are the consequences when solicitors get access to their adversary's privileged material by their own carelessness. Is the onus on them to prove that there has been no prejudice to the party whose privilege has been breached? Or is the onus on the 'wronged' party, to prove that this breach of their privilege may be significant? And supposing a court recognizes that real prejudice is a possibility, what is the remedy? When should a court insist on the discharge of the solicitors who have seen the privileged material which they should not have seen?

The case is Celanese Canada Inc. v Murray Demolition Corp., which appears on appeal as Canada Bearings Ltd. v. Celanese Canada Inc. 2006 SCC 36. Celanese, the Plaintiffs, owned a chemical factory which used proprietary and secret technology. They hired the defendants (several contractors) to demolish it. They alleged that some contractors had used the demolition work as an opportunity to wrongfully gather information about that secret technology, and that those trade secrets were being used to build a similar chemical factory in Iran. One of the demolition contractors was Canada Bearings Ltd. Celanese executed an Anton Piller order on Canada Bearings. During the search, 1,400 computer files deemed relevant were copied onto a CD-ROM, which was put in a sealed envelope. The Supervising attorney gave a copy of the CD to Celanese's solicitors (and their US counsel) before he had sorted out and removed privileged material. These lawyers had 'reviewed' some privileged emails. Canada Bearing's lawyers discovered this, and applied for Celanese's solicitors (and their US counsel) to be removed from the case.

It might be useful to set out from the Supreme Court judgment what the applicant's lawyers actually saw:

The CD turned out to contain privileged communications. The Cassels Brock [Celanese's Canadian solicitor] lawyer admitted to having reviewed “a few dozen e-mail[s] in full”, but said he did not recall reviewing “any e-mail that originated from or were sent to BLG”.

A copy of the CD was also provided to Kasowitz [Celanese's US attorneys] and was reviewed by Todd Colvard, a Kasowitz lawyer based in Houston. He was directed to classify the electronic documents as “Relevant, Irrelevant, Proprietary, and Hot”. Colvard noticed that some of the e-mails were addressed to or from BLG, and so saved these in a separate fifth electronic folder which he marked “Privileged”. He later found additional privileged documents in the folder marked “Relevant”, thus evidencing a measure of misclassification. Other than for purposes of segregation, Colvard says he did not review “the substance of those messages”.

The Supreme Court decided that this was enough to create a presumption of prejudice to the party who privilege had been breached. There was no onus on them to prove that they had been or were in real danger of being prejudiced. The court's underlying thinking was that because an Anton Piller is such a draconian order, it is important to keep the applicant's conduct to the highest standards.

The court also made the point that the applicants seemed 'precipitate' in looking at the copied computer files. As if they regarded the purpose of the search order as to obtain evidence. The court made the point that a search order is not intended to be a way of obtaining evidence but of securing evidence against destruction. Once the evidence has been preserved, the purpose of the order has been achieved and there is no reason why the applicant should be in a hurry to look through the seized documents.

So let us look at the practicalities of handling computer data which may be privileged.

With respect to English cases, the standard form search order annexed to CPR includes the following:

If the Supervising Solicitor decides that the Respondent is entitled to withhold production of any of the documents on the ground that they are privileged or incriminating, he will exclude them from the search, record them in a list for inclusion in his report and return them to the Respondent.

If the Supervising Solicitor believes that the Respondent may be entitled to withhold production of the whole or any part of a document on the ground that it or part of it may be privileged or incriminating, or if the Respondent claims to be entitled to withhold production on those grounds, the Supervising Solicitor will exclude it from the search and retain it in his possession pending further order of the court.

The practice direction to CPR25, at 7.5, reads

(1) no material shall be removed unless clearly covered by the terms of the order, (2) the premises must not be searched and no items shall be removed from them except in the presence of the respondent or a person who appears to be a responsible employee of the respondent, …. (6) the Supervising Solicitor must make a list of all material removed from the premises and supply a copy of the list to the respondent, (7) no material shall be removed from the premises until the respondent has had reasonable time to check the list,....

So it seems however daunting the task, if the order is in this standard form, the respondent can insist that the privileged computer files are separated out during the execution of the search (rather than copied during the search and sorted through later). This might make life difficult for those executing the order and for the supervising solicitor, but it appears to be the most compliant way of proceeding. If you are a solicitor assisting the respondent, you should probably consider insisting on this.

One alternative is what happened in the Celanese case. The supervising solicitor can take a copy of all computer files which look relevant, then sort through them later, inviting the respondent's solicitor to either be present, or to comment on individual files before taking a decision. This is more practical. But the supervising solicitor may well have to go through the files one by one, if the respondent insists.

What about the system of imaging the hard disks en masse, without any sorting before copying, and analysing them later? Well, if the order provides for that, again the files will have to be analysed by the supervising solicitor, perhaps at great expense, and he must pass to the applicants only what they entitled to see. Because the applicant is not permitted to remove material which is not relevant, if the order does not provide for imaging hard disks, the respondent should probably not permit it, and really can, and probably should, make the supervising solicitor examine, list, and decide on privilege (and perhaps relevance) for each file or email, or group of files or emails, found on the hard disk before (rather than after) taking copies. This is clearly a big and expensive job for everyone involved. In these cases it may also be necessary to distinguish material which would is described by the practice direction as 'confidential.'

If the respondent chooses to trust the supervising solicitor to take away images of hard disks, and to separate out privileged material, then the respondent can still seek a remedy if privileged material ends up in the wrong hands, especially if that happens before he has been consulted about a possible claim to privilege.

Turning to the legal issue: what should happen when the applicant gets hold of privileged material which he should not see? Should the solicitor or advocate be barred from acting? The Canadian Supreme Court decided that the onus in this situation is on the party who may have seen the privileged information to prove there has been no prejudice. There is a presumption of prejudice, and there is no onus on the prejudiced party to prove prejudice before the court will consider giving a remedy.

Since there is no decision directly on the question in issue, the Supreme Court of Canada, in considering whether to bar Celanese's lawyers from acting, followed a 1990 Canadian decision on a case where a junior privy to details of one party's case had gone to work for the other party's firm. That followed a US case. The English equivalent leads to the same conclusion. The House of Lords decided in Bolkiah v KPMG [1998] UKHL 52 that where a firm may have access to information belonging to clients with conflicting interests, it faces a heavy burden to prove that its former client will not be prejudiced. It is likely that an English court would, like the Canadian Supreme Court, carry over the reasoning from these conflict of interest cases to a case where improper access privileged documents risks causing prejudice to the owner of the privilege.

On that basis, the guidance which the Canadian case provides is useful for English lawyers considering the consequences where a breach of privilege may have occurred with respect to computer files copied during a search order. I conclude by quoting the most basic extracts of the reasoning of the court when it was deciding whether to remove Celanese's lawyers:

59 In helpful submissions, the interveners Advocates’ Society and the CBA suggest a number of factors to be considered in determining whether solicitors should be removed: (i) how the documents came into the possession of the plaintiff or its counsel; (ii) what the plaintiff and its counsel did upon recognition that the documents were potentially subject to solicitor-client privilege; (iii) the extent of review made of the privileged material; (iv) the contents of the solicitor-client communications and the degree to which they are prejudicial; (v) the stage of the litigation; (vi) the potential effectiveness of a firewall or other precautionary steps to avoid mischief. Other factors may, of course, present themselves in different cases, but I agree that the foregoing list of factors is appropriate and seems to me sufficient to dispose of the present appeal.

60 As to the first factor, the privileged documents came into the hands of Cassels Brock and Kasowitz under the exceptional Anton Piller order in a way that was unintended but avoidable. Inadequate precautions were taken. Those who fail to take precautions must bear the responsibility....

61 As to the second factor, Cassels Brock failed to have the electronic documents listed at the search site as required by the order.... 62 As to the third factor, the CBA submits that the plaintiff’s counsel should not only promptly return the inadvertently disclosed privileged materials, but also “advise the adversary of the extent to which those materials have been reviewed”. I agree. Here, Cassels Brock and Kasowitz deny any “substantive review”, but the review must have been sufficiently thorough to classify documents as “Relevant, Irrelevant, Proprietary, and Hot”....

63 As to the fourth factor, Cassels Brock and Kasowitz failed to discharge the onus of identifying the contents of the solicitor-client communications which they accessed in the course of classifying the material. It is therefore not possible to determine “the degree to which they are prejudicial”. As stated, Celanese’s solicitors and counsel created this problem by their failure to proceed with prudence and they and Celanese will now have to shoulder the consequences.

64 As to the fifth factor, the litigation is at an early stage. ....

65 Sixth, and finally, with respect to “the potential effectiveness of a firewall or other precautionary steps”, Cassels Brock advised the court of a number of measures taken (although, in the defendant’s view, too little and too late). The motions judge held that “an affidavit from the attorney in charge of this matter for the Kasowitz firm ought to have been filed confirming that such [privileged] material had been deleted and that no one at that firm had accessed the information prior to such deletion (with the obvious exception of Mr. Colvard who has been isolated from the case)”. I agree.....

So if anything goes wrong the isolation of privileged material during a search (as it very easily can in the case of computer files) the applicants are exposed to the risk of being barred from acting. Applicants and supervising solicitors need to be very careful indeed; and carelessness on their part gives ammunition to the respondent, to apply to have them removed.

Dr John Birchall - Professional English, Legal English, and Common Law Training