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Obtaining Confidentiality Orders in Canada

Obtaining Confidentiality Orders in Canada

Often in product liability claims, companies are sensitive about releasing some materials and information exchanged in litigation to the public. Commercial litigants in general are always looking for new and effective ways to keep their entity’s valuable information from becoming public through the court process.

Commercial entities particularly resort to section 137 (2) of the Courts of Justice Act,[1] which grants the Court the authority to treat any document in a civil proceeding as confidential, sealed and not be part of the public record. Although confidentiality orders are routinely granted, litigants, especially corporations, must meet the stringent criteria established by the Supreme Court of Canada (SCC) in Sierra Club of Canada v. Canada (Minister of Finance).[2]

The SCC in Sierra Club held that a confidentiality order should only be granted when:

  1. Such an order is necessary to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonable alternative measures will not prevent the risk;

Three essential elements are subsumed under this branch of the test:

  1. First, the risk must be real and substantial, well grounded in evidence, posing a serious threat to the commercial interest in question.
  2. Second, the substantial commercial interest must be one which can be expressed regarding a public interest in confidentiality, where there is a general principle at stake.
  • Finally, the judge is required to consider not only whether reasonable alternatives are available to such an order but also to restrict the order as much as is reasonably possible while preserving the commercial interest in question.
  1. The salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which in this context includes the public interest in open and accessible court proceedings.

Essentially, the test is administered in two steps: (1) the party seeking the order must establish that it is necessary; and (2) the Court must weigh the salutary effects of the order against any deleterious effects.

The spirit of Sierra Club mandates that when determining the appropriateness of a confidentiality order, a Canadian Court is required to keep a proper balance between the protection of confidential information on one hand and ensuring the protection of section 2(b) of the Charter and Rights and Freedoms (i.e. freedom of expression) and the open and transparent court process on the other.

[1] R.S.O. 1990, c. 43.

[2] [2002] 2 S.C.R. 522 [Sierra Club].