Secrecy in litigation: good, bad or otherwise?
Court orders for secrecy sometimes raise difficult issues and one understands a sealing order. Other times, the secrecy appears completely undeserved. A recent example of apparently undeserved secrecy is playing out in Canada in connection with tobacco companies seeking insurance payments for their expenses in defending tobacco cases.
The unfolding story arises from a blog known as Eye on the Trials. The blog provides a daily summary of a lengthy, ongoing trial involving government cost recovery claims against the Canadian arms of tobacco companies - this FAQ page provides a summary of the trial issues.
The secrecy issues arise from the December 12, 2012 post at Eye on the Trials. The post was writteny by Cynthia Callard, and summarized the contents of a tobacco company affidavit filed in a different case. Specifically, the affidavit identified underlying cases for which the tobacco companies were seeking reimbursement from a defunct insurance company (Kansa). The summary included a list of the underlying cases. As it turns out, the affidavit was supposed to be under seal and not accesible. However, things happened and the affidavit was left open in a court file, leading to the blog post summarizing the affidavit.
In short order, however, the tobacco company obtained a court order requiring Eye on the Trial to delete the summary of the affidavit. That set of events is covered in a December 14, 2012 post on Eye on the Trials.
As it happens, I subscribe by email to the Eye on the Trial blog posts, and so have an email copy of the now altered December 12, 2012 post. The text of that email is pasted below in full so that readers can decide for themselves the appropriateness of the sealing order. I cannot see any reasonable justification for sealing a list of lawsuits against tobacco companies.
"Day 94. Nineteen Documents. One hundred twenty-seven million dollars
Posted: 13 Dec 2012 07:46 AM PST
Courtroom 17.09 at Montreal's Palais de Justice was almost empty today. There was no witness. No media. No audience. There were hardly any lawyers.
The entire day was given to discussions about the status of 19 documents that were referred to in historian Robert Proctor's (now abridged) expert report.
The list of documents under discussion was flashed on the screen, and most of them are already on the trial record as exhibits. Without a witness to testify about them, however, they have been relegated to the category of documents admitted under Justice Riordan's "May 2nd Judgement." It would seem this is not good enough.
The plaintiffs want each of these 19 documents to be given a higher standing and asked Justice Riordan to admit them as proof under the provisions of Quebec's Code of Civil Procedure:
2870. A statement made by a person who does not appear as a witness, concerning facts to which he could legally testify, is admissible as testimony on application and after notice is given to the adverse party, provided the court authorizes it.
The court shall, however, ascertain that it is impossible for the declarant to appear as a witness, or that it is unreasonable to require him to do so, and that the reliability of the statement is sufficiently guaranteed by the circumstances in which it is made.
The reliability of documents drawn up in the ordinary course of business of an enterprise, of documents entered in a register kept as required by law and of spontaneous and contemporaneous statements concerning the occurrence of facts is, in particular, presumed to be sufficiently guaranteed.
After nine months of trial-watching, I should have a better handle on these issues. But even after listening to the presentations by Philippe Trudel and Guy Pratte on the legal theory and practice, and their thoughtful discussions with Justice Riordan, my attempt to explain the legal issues would be counter-productive.
What I could understand is that this is a reminder of the challenges in redressing wrongdoings from previous generations. Evidence delayed may become evidence denied!
Gossip from another trial
The session adjourned early and, a little embarrassed at having so little to report on my day, I dropped by the 12th floor office of another justice of the Quebec Superior Court who is a long trial involving Imperial Tobacco and Rothmans, Benson and Hedges.
This case involves a dispute between the failed insurance company Kansa General and the two tobacco companies it insured. Documents on the Legacy site explain why the IMASCO chose this insurer, as it was the only company willing to include liability for "health hazards" and it was willing to pick up legal costs of defending against liability claims.
I was intrigued by the number of Appeal Court rulings (such as this one) on the issue of whether or not the companies would be required to disclose itemized accounts for the legal fees they were claiming from the insurance company. I wondered if the court file had any further details.
I spent a pleasant half hour sitting in airy office of the secretary to Justice Jean-Yves Lalonde. With files from other cases stacked around me, I used the remaining small space of a coffee table to rummage through a banker's box of filings.
In the time available, I did not get very far. But I did uncover an interesting affidavit signed earlier this year (March 30, 2012) by Imperial Tobacco's Manager of Pension Investment and Insurance, Algis Janusauskas.
His affidavit explains that Imperial Tobacco had three "Excess/Umbrella" policies with Kansa General Insurance. It identifies 34 liability suits the company had been involved in. (For ease of reference, I have pasted a table of these below -- with the provincial suits filed this summer, the current number would be higher.)
The most jaw-dropping sentence in his affidavit read:
Pursuant to the Policies and Claims, ITCAN hereby claims from the Liquidator the amount of 146,916,461.63 Canadian dollars and 271,404.00 United States Dollars, composed of 126,916,461.63 Canadian Dollars and 271,404.00 United States Dollars incurred and paid as of the date hereof as defence fees and costs and the aggregate amount of 20,000,000.00 Canadian Dollars representing the total indemnity payable to ITCAN under the Policies, in accordance with the terms set forth therein. (Emphasis worth adding!)
Can Imperial Tobacco really have already spent $127 million on legal fees? When someone else is picking up the tab for legal expenses but not for claims, no wonder they have adopted a scorched earth policy!
Cases listed in Mr. Janusauskas' March 2012 affidavit
Ontario Court General Division No. 95-CU-82186
Ontario Court (General division) Small claims court No. 21513-1997
Ontario Court (General Division) No. C17773/9
Ontario Superior Court. O. 00-CV-183165
Ontario Superior Court 00-CV-196070
Ontario Superior Court 00-CV-195898
Ontario Superior Court 1442/03
British Columbia Supreme Court No. C961769
HMTQ British Columbia
Supreme Court of British Columbia No. C985776
Supreme Court of British Columbia No. S010421
Supreme Court of British Columbia No. L031300
Quebec Small claims. No. 100-32-000734-963
Quebec Small claims Division No. 100-32-000781-964
Christine Fortin, Cécilia Létourneau and Joseph Mandelman
Superior Court of Quebec No. 500-06-000070-983
Superior Court of Quebec No. 500-06-000076-0980
Superior Court of Quebec No. 500-06-000278-057
Superior Court of the state of California No. 307006
Court of Queens Bench of Alberta No. 0001-05941
Supreme Court of Nova Scotia No. 177663
Tobacco Health Care Costs Recovery Act
Supreme Court of Newfoundland and Labrador, Corut of Appeal No. 2002 01 H 0087
Supreme Court of Newfoundland and Labrador 2002 01 T 4720
Victor Todd Sparks
Supreme Court of Newfoundland and Labrador No. 2004 01 T 2716 CP
Ontario Superior Court No. CV-09-387984
Flue Cured Tobcco Growers Marketing Board
Ontario Superior Corut No. CV-10-14709
Supreme Court of British Columbia No. 10-2780 Victoria Registry
Supreme Court of British Columbia No. 10-2769 Victoria Registry
Superior court of Quebec no. 505-17-003095-074
Imperial Tobacco vs. AG Quebec
Superior Court of Quebec No. 500-17-052494-096
Alberta Court of Queens Bench No. 0901-08964
Supreme Court of Nova Scotia No. 312869 2009
HMTQ New Brunswick
New Brunswick Court of Queens Bench No. F/C/88/08
Saskatchewan Court of Queen’s Bench No. 1036 of 2009
Saskatchewan Court of Queen's Bench No. 916 of 2009
Manitoba Court of Queen’s Bench No. CI09-01-61479
AG Newfoundland and Labrador
Supreme Court of Newfoundland and Labrador Trial Division No. 2011 01G 0826
Supreme Court of Newfoundland and Labrador Trial Division No. 2011 01 G 3695
United States District Court for Southern District of New York 00-CIV-1593"