When an Ontario business anticipates a lawsuit, it has a strict legal duty to issue a Litigation Hold. This requires the IT department to immediately suspend all auto-delete policies and preserve every relevant email, Slack message, and digital document to prevent the illegal destruction of evidence (spoliation).
In modern commercial litigation in Ontario, cases are rarely won with dusty paper documents. Instead, corporate disputes are decided by “e-discovery”-the exchange of millions of internal emails, text messages, and instant messaging chats. 📱 Because digital data is so easily altered or automatically deleted by software, the law places a heavy burden on businesses to protect potential evidence.
The moment your company reasonably anticipates being sued, or plans to sue someone else, you must trigger a Litigation Hold (also known as a legal hold). Failing to preserve electronic evidence can lead to devastating consequences in the Superior Court of Justice, including massive financial sanctions or a judge simply ruling against your business by default. Furthermore, under Ontario’s landmark Civil Rules Review initiative, the province plans to transition toward a streamlined, “reliance-based” disclosure model for documents in commercial disputes. While a joint statement by Attorney General Doug Downey and former Chief Justice Geoffrey Morawetz on May 28, 2026, confirmed that 2026 reforms will focus on early practical improvements (such as streamlining originating processes and default procedures) while broader reforms like the reliance-based model are studied further for staged future implementation, the legal obligation to issue robust litigation holds and properly preserve electronic records remains as strict as ever.
Step-by-Step Process in Ontario
Whether your corporate headquarters is in Markham, Waterloo, or Toronto, the Ontario Rules of Civil Procedure demand strict compliance with evidence preservation. Corporate counsel and IT departments must work closely to execute the following steps.
Step 1: Identify the Trigger Event
You do not need to receive a formal Statement of Claim to trigger a litigation hold. The duty arises when litigation becomes a reasonable prospect. 🚨 This could be receiving a formal demand letter from a law firm, a serious customer injury on your premises, or a massive breach of contract by a key supplier. Once the trigger happens, the clock starts ticking.
Step 2: Draft and Distribute the Hold Notice
Your company’s legal counsel must draft a formal written Litigation Hold Notice. This internal memo is sent to all employees who might possess relevant information (known as “custodians”). The notice clearly instructs them not to delete, alter, or destroy any emails, documents, handwritten notes, or texts related to the specific dispute. Employees must sign or click to acknowledge they received and understood the order.
Step 3: Suspend IT Auto-Delete Policies
This is the most critical technical step. Most corporate IT environments have automatic retention policies (e.g., auto-deleting all emails older than 90 days or wiping Slack channels every week). Your IT department must immediately suspend these auto-delete functions for the targeted custodians. 🔒 If an automated system destroys relevant emails after the hold is triggered, the court will hold the company entirely responsible.
Step 4: Collect and Isolate the Data
Telling employees not to delete things is not enough; you must actively secure the data. IT staff or third-party forensic experts should take digital snapshots of hard drives, cloud storage (like Google Workspace or Microsoft 365), and corporate mobile phones. This data is then isolated in a secure, tamper-proof environment for lawyers to review later.
Step 5: Continuously Monitor and Update
A litigation hold is not a one-time event. As the lawsuit evolves over months or years, new employees may join the project, and new issues may arise. Legal counsel must routinely remind staff that the hold is still active and update the IT department if new data sources need to be preserved.
Proper Preservation vs. Spoliation
| Action | Standard Business Practice | During a Litigation Hold |
|---|---|---|
| Email Inbox Management | Employees routinely delete old emails to save server space. | All deletions of relevant topics are strictly forbidden. |
| Departing Employees | Laptops are wiped and reissued to new hires immediately. | The hard drive is forensically imaged and saved before wiping. |
| Consequence of Deletion | Considered normal corporate housekeeping. | Considered “Spoliation” (illegal destruction of evidence). |
How Much Does it Cost in Ontario?
Handling electronic discovery and litigation holds requires specialized software and professionals. Costs for a mid-sized commercial dispute in 2026 often include:
- E-Discovery Platforms: Licensing cloud-based software to securely host and search gigabytes of preserved emails has become significantly more affordable due to cloud advances and AI integration, typically costing between $5 and $15 CAD per gigabyte per month, or offered via flat-rate case packages.
- Forensic IT Consultants: If you need external experts to image cell phones and servers without altering metadata, expect to pay $250 to $450 CAD per hour.
- Law Firm Review: Having junior lawyers or paralegals review the preserved documents to decide what must be handed over to the opposing side is usually the most expensive part, often costing tens of thousands of dollars.
How Long Does the Process Take?
Issuing the initial Litigation Hold Notice must happen immediately-usually within 24 to 48 hours of anticipating the lawsuit. However, the hold itself remains active for the entire duration of the legal dispute. In Ontario, commercial litigation can take 2 to 5 years before a trial or final settlement occurs. You cannot lift the hold and delete the data until the case is officially closed and all appeal periods have expired.
Frequently Asked Questions (FAQ)
What is “Spoliation”?
Spoliation is the legal term for the intentional or negligent destruction, alteration, or concealment of evidence. If an Ontario judge finds your company guilty of spoliation, they can presume the destroyed evidence was damaging to your case and rule in favour of the other side.
Are employees’ personal cell phones included?
Yes. If your company operates a Bring Your Own Device (BYOD) policy, and employees discuss business matters via text or WhatsApp on their personal phones, those messages are legally considered corporate data and must be preserved under the hold.
What if we accidentally deleted emails before the hold started?
If emails were deleted months ago as part of a routine, good-faith document retention policy before anyone knew a lawsuit was coming, the court will generally not penalize you. The duty to preserve only starts once litigation is anticipated.
Can we just print everything out instead of saving the files?
No. You must preserve the native electronic files because they contain hidden “metadata” (such as the exact time a document was created, who authored it, and when it was last modified), which is often crucial evidence in court.
Do we have to hand all this data over to the other side immediately?
No. Preserving the data is step one. Later in the lawsuit, during the “Discovery” phase, your lawyers will review the preserved data and remove anything covered by solicitor-client privilege before legally sharing the relevant files with the opposing party.
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