Sealing Orders: Overcoming the Open Court Principle

Parties to a lawsuit are often surprised to learn that the accusations thrown at them, and at times deeply personal information about them, may be filed in the court system and open to the entire public. Instinctually, many parties may wish to have certain personal information disclosed in the litigation not form part of the public record.

Their instincts, while reasonable, are often unlikely to overcome the “open court principle”. The principle of open courts is a cornerstone of the Canadian justice system, ensuring that hearings and records must be open to the public.¹ The principle is crucial to maintain public confidence in the justice system by promoting transparency and accountability.

This principle is not absolute, however, and courts will grant exceptions to the open court principle by way of confidentiality orders² when required to protect other important public interests. Parties and non-parties involved in litigation will need to familiarize themselves with the high evidentiary burden of overcoming the open court principle.

Legal Framework

Section 137 of the Courts of Justice Act addresses access to documents filed in a proceeding. Section 137(2) empowers the court to order that “any document filed in a civil proceeding before it be treated as confidential, sealed and not form part of the public record.”

When seeking a confidentiality order, the applicant bears the onus, and must overcome a high evidentiary burden, to demonstrate that an exception to the open court principle is warranted.³ The request must fall within one of two broad categories of exceptions: statutory exceptions (like those under Section 137(2) of the Courts of Justice ActR.S.O. 1990, c. C. 43⁴) or judicial exceptions established through common law.

The test for discretionary limits on presumptive court openness was originally expressed in the case of Sierra Club of Canada v. Canada (Minister of Finance). In Sierra Club, the Supreme Court 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 reasonably alternative measures will not prevent the risk”; and
2. “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.”⁵

The Supreme Court of Canada (“SCC”) in Sherman Estate v. Donovan is the most recent SCC decision articulating the test for finding an exception to the open court principle. The SCC expanded the test established in Sierra Club to include a third core prerequisite. The reformulated test applicable to the case at bar is as follows:

3. In order to succeed, the person asking the court to exercise discretion in a way that limits the open court presumption must establish that:

1. 1. “Court openness poses a serious risk to an important public interest;
   2. The order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and
   3. As a matter of proportionality, the benefits of the order outweigh its negative effects.”⁶

Only where all three of the prerequisites as set out in Sherman have been met can a discretionary limit on openness be properly ordered. The determination of whether an interest faces a “serious risk” is a finding based on the facts and must be contextualized by the judge when assessing the suitability of a particular order. There is judicial discretion that provides significant flexibility to address harm to fundamental values in our society over time.⁷

Commercial Interests and the Need for Evidentiary Specificity

The Supreme Court in both Sierra Club and Sherman Estate recognized that an “important interest” can include a commercial interest. In Sierra Club, Iacobucci J (as he then was) restated that “test to capture any serious risk to an “important interest, including a commercial interest, in the context of litigation.”⁸ He simultaneously clarified that the important interest must be expressed as a public interest. For example, on the facts of that case, a harm to a particular business interest would not have been sufficient, but the “general commercial interest of preserving confidential information” was an important interest because of its public character.⁹

On that basis, the Court may decide to hear the matter in camera or in private, with the press and the public excluded to preserve confidential information.

In the recent Supreme Court decision of Canadian Broadcasting Corp v Named Person,2024 SCC 21¹⁰ the SCC was tasked with determining whether the lower court’s decision to hold its hearing in camera and the Court of Appeal’s decision to issue a sealing order was justified.

Canadian Broadcasting reinforces the principle that parties will have to carefully tailor confidentiality orders to seal only confidential information, and emphasizes that the open court principle is not absolute; it can be overridden when necessary to protect competing interests. The Court clarified that the issuance of a sealing order must be the exception rather than the rule.

Sherman Estate and Canadian Broadcasting created more hurdles that commercial entities must be prepared for:

1. The level of detailed evidence required to demonstrate that the disclosure of the information would result in a specific and serious risk to an important commercial interest is high;
2. The Sierra Club/Sherman Estate test’s requirements for necessity and proportionality will remain strictly enforced. Companies seeking a sealing order must demonstrate that no less restrictive measures can adequately safeguard their interests, and that the advantages of sealing the information outweigh the negative consequences for the open court principle and freedom of expression.
3. The applicant must show that no reasonable alternative measures will be sufficient to protect the interests at stake; and
4. In commercial litigation, sealing orders are generally expected to be narrow in their application, both in how long they last and what they cover. Courts will tend to restrict the order’s duration to the minimum time required to safeguard the interest at risk, and will only seal the specific documents or portions of documents that actually contain the sensitive information.

A party seeking a confidentiality order must establish that the disclosure of the information at issue would impact an interest that goes beyond harm to the private commercial interests of a person or a business.

Other Considerations

1. The Non-Party Distinction/Protection of the Innocent

Where an individual’s privacy concerns prompt the request for a sealing order, a critical factor is the status of the individual whose privacy is at risk.

For example, the Supreme Court of Canada has acknowledged that the protection of the innocent is a “valid and important policy consideration.”¹¹ Similarly, where the privacy interest belongs to a non-party to the litigation, the standard access to justice concerns vis a vis the open courts principle do not apply because the non-party’s access to the courts is not at stake and they have no choice available to terminate the litigation or avoid their private information from being exposed.¹² Simply, they are not a “volunteer” to the litigation.¹³ Courts have also granted confidentiality orders for non-party witnesses and informers who faced potential risk if their identity was disclosed.¹⁴

2. The Nature of the Impugned Information

 The nature of the impugned information, and the proposed method of sealing that information, may also impact a party’s chances of success in securing a sealing order.

For example, where litigants try to seal information that already forms part of the public domain, (e.g., allegations of criminal conduct referenced in a newspaper article), courts will be less inclined to grant a sealing order. That is because, logically, it is significantly more difficult to show how maintaining the open court principle will result in a meaningful loss of dignity or privacy.

Furthermore, Courts are hesitant to grant confidentiality orders, specifically redaction orders, if the result is a document conveying little meaning. If what is meant to be redacted is imbued throughout the whole document, redaction may be impossible and found to be disproportionate to the harm, meaning that an alternative form of confidentiality may be necessary.¹⁵

3. Substance Abuse, Criminality and Mental Health

Courts have exercised their discretion to limit openness to protect personal information, including the disclosure of a party’s history of substance abuse and criminality, especially if they are a victim of crime.¹⁶

In Khan v Law Society of Ontario, Mr. Khan brought a motion for a sealing order of medical records that were part of the evidentiary record of professional misconduct proceedings brought by the Law Society of Ontario against Mr. Khan. The court ultimately granted a sealing order for Mr. Khan’s medical records detailing his chronic physical and mental illness.¹⁷

The court noted that Mr. Khan successfully showed that there is a serious risk that the disclosure of highly sensitive personal information would be an affront to his dignity and be more than just discomfort or embarrassment, which constitutes an exception to the open court principle and is justified.¹⁸

A Note on Procedure

 Prior to bringing a motion for a confidentiality order, the moving party must satisfy procedural notice requirements. As set out in the Consolidated Civil Provincial Practice Direction (the “Practice Direction”),amended February 1, 2024, Part VI, sections 115 to 122, the moving party must generally complete and submit a “Notice of Request for Publication Ban” or seek leave of the court to dispense with the notice requirement.¹⁹ Although the Practice Direction only directly mentions publication bans, according to Sherman Estate, any order limiting court openness is of no different quality than an order limiting publication of a judgement.²⁰

Conclusion

The jurisprudence is clear that whether protecting an innocent individual’s dignity or a company’s confidential data, the court’s starting point is rooted in the principle of openness. The path to obtaining a confidentiality order is challenging and requires a context-specific approach. Any limitation requires compelling evidence that an identified public interest will be subjected to serious and disproportionate risk if the court record is not subject to a confidentiality order.