R.I.P. consent protective orders

03 October 2017

In a sweeping change to Federal Court practice, Prothonotary Tabib in LFOW v Soldan Fence, 2017 FC 858 concluded that "the Court ought no longer to routinely issue protective orders on consent of the parties." This decision likely marks the end of the routine consent orders that govern the treatment of confidential documents and information during discovery.


In recent years, Federal Court practice and jurisprudence has developed a dichotomy between "Protective Orders" and "Confidentiality Orders". The former primarily deal with governing confidentiality obligations and procedures between the parties in a proceeding. The latter deal with maintaining confidentiality over documents and information filed with the Court. In the absence of a Confidentiality Order, materials filed in Court would otherwise be made public.

As had become common practice in the Federal Court, the parties in LFOW v Soldan Fence made an informal request, on consent, for a protective order in the form agreed to by the parties. Following the request, the Court requested written submissions and a hearing on the matter, and ultimately decided that it should not issue a protective order.

The motivation behind the change

A central finding of the Court was that matters concerning how confidential documents and information are to be handled during discovery are by and large matters between the parties and need not involve the Court. The Court found that its already burdened and limited resources should not be used where a viable alternative is available without the need to implicate the Court. The Court's view was that, if the parties wish to enter into any specific obligations beyond those covered by the implied undertaking rule, then the preferred method for doing this is by way of a private agreement between the parties.

A secondary consideration was the apparent perception that protective orders were being misused, either by inadvertence, ignorance or negligence. For example, the Court made note of prior instances in other court proceedings where documents were filed in Court under seal "pursuant to the protective order" in the proceeding when no corresponding confidentiality order had been granted or was being appropriately sought notwithstanding the dichotomy described above.

The implied undertaking rule

Litigants and their counsel will, however, take comfort in the Court's extensive description and summary of the common law doctrine known as the implied undertaking rule. The Court noted that "[the] vast majority of the substantive provisions of typical protective orders are already covered by the common law doctrine of the implied undertaking rule." Specifically, the Court found that the Rule already:

  • includes all documentary productions, as well as information disclosed in oral discoveries;
  • restricts the parties' use of discovery information to the purposes of the litigation and no other purpose;
  • protects information disclosed during discovery even if no specific designation has been made, and regardless as to whether or not it is marked as "confidential";
  • provides that a waiver may be granted by the disclosing party or the Court;
  • requires parties to advise third parties to whom they disclose discovery information of the existence and strictures of the implied undertaking rule;
  • excludes information that was lawfully obtained by a party outside of the discovery process;
  • requires parties who inadvertently breach the undertaking to take all necessary steps to prevent further disclosure;
  • extends beyond the termination of the proceedings and provides for the right of parties to request the return or destruction of information not publicly disclosed at the end of the proceeding;
  • extends to third parties or their counsel, including experts that have been retained, and can be enforced by the Court as against these third parties; and
  • restricts the internal dissemination within a party of discovery information indiscriminately and without a discernible purpose connected to the litigation.

Further, the Court noted that the Rule is applicable to a party immediately upon receipt of any discovery information. There are no requirements to trigger the Rule.

Expanding the implied undertaking rule & the Federal Court's jurisdiction

Notwithstanding the lengthy summary of what the implied undertaking rule entails, the Court acknowledges that in certain circumstances parties may have legitimate reasons to impose further restrictions on materials provided in the discovery process.

As an alternative to issuing a protective order, the Court suggested that an agreement between the parties should be sufficient.

In LFOW v Soldan Fence, the parties questioned whether the Federal Court had jurisdiction to deal with what would essentially be non-disclosure agreements, as breach of contract disputes are generally a matter of provincial jurisdiction. In response, the Court indicated that because such an agreement by the parties would amount to an undertaking by the parties to expand the implied undertaking rule, and that so long as such undertakings are "strictly related to the procedural aspects of litigation and aim to assist in regulating the Court's process", the Federal Court would have jurisdiction to deal with them. Indeed, the Court suggested the breach of these undertakings beyond the implied undertaking rule could be punishable by contempt if necessary.

Moving forward

The Court is clearly setting a new course regarding how parties are to approach and manage the handling of confidential materials during the discovery phase of a proceeding. Litigants in the Federal Court should take comfort in the expansive summary provided by the Court on the scope of the implied undertaking rule. Although the Court has expressed that further obligations beyond the Rule should be dealt with by way of agreement or explicit undertakings, litigants should nevertheless take comfort in the fact that these agreements can be enforced in the Federal Court should the need arise.

As parties transition to the new practice, no doubt new issues will arise along the way. For example, parties will need to proactively address and devise a process for ensuring confidential materials are not filed in Court without a designating party having a reasonable opportunity to obtain a confidentiality order. In this regard, parties may alternatively wish to consider pre-emptive and focused Rule 151 motions for specific confidential documents disclosed during discovery where there is an expectation or good likelihood the documents will eventually be filed in Court. In addition, it is expected that parties may need to call upon the Court to intervene in the event that they are unable to come to an agreement concerning the handling of confidential information and documents in a proceeding.

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