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The implied undertaking rule binds both lawyer and client (and insurer)

In Harman v. Home Office, [1982] 1 All E.R. 532 (H.L.) the House of Lords explained that the implied undertaking rule binds counsel:
 
[The order for production of documents to a solicitor on behalf of a party] is made on the implied undertaking by the solicitor personally to the court (of which he is an officer) that he himself will not use or allow the documents or copies of them to be used for any collateral or ulterior purpose of his own, his client or anyone else; and any breach of that implied undertaking is a contempt of court by the solicitor himself.
(Harman v. Home Office, [1983] 1 A.C 280 at 304, [1982] 1 All E.R. 532 (H.L.)).
 
That rule applies equally in Canada:
 
The rule applies during the case to both a party and the party’s representatives, and it remains applicable after the trial ends [in relation to information not disclosed to the court during trial].
(Lac d'Amiante du Québec Ltée v. 2858-0702 Québec Inc., 2001 SCC 51 at para. 76. See para. 65 of that case for authority for the qualification stated in the square brackets).
 
In Juman v. Doucette, 2008 SCC 8 the Supreme Court of Canada confirmed that not just lawyers but also their clients (i.e. the parties to the civil disputes) are bound by the implied undertaking rule. In that case a childcare worker was sued after a child in her care suffered a brain injury. The childcare worker gave evidence on examination for discovery and that information became known to the child’s parents. The Supreme Court of Canada confirmed that the parents would have had to apply for a court order permitting them to disclose the information obtained on discovery to the police had they wanted to make such disclosure: 
 
Here, if the parents of the victim or other party wished to disclose the appellant’s transcript to the police, he or she or they could have made an application to the B.C. Supreme Court for permission to make disclosure, but none of them did so…
(Juman v. Doucette, 2008 SCC 8 at para. 5).
 
The court expressly stated that the parties to civil disputes are bound by the implied undertaking:
 
[T]he law imposes on the parties to civil litigation an undertaking to the court not to use the documents or answers for any purpose other than securing justice in the civil proceedings in which the answers were compelled…
(Juman v. Doucette, 2008 SCC 8 at para. 27, emphasis added).
 
Other cases have confirmed the above:
 
[T]he implied undertaking applies to both the parties and their lawyers.  
(Svorinic v. Svorinic, 2012 BCSC 826 at para. 59).
 
The foregoing confirms that both lawyers and clients are bound by implied undertakings with respect to information disclosed under compulsion of the Rules of Court.
 
In Chonn v. DCFS Canada Corp dba Mercedez-Benz Credit Canada, 2009 BCSC 1474 the court held that the defendants’ insurer was also bound by the implied undertaking:
 
A party who has documents from earlier litigation that are impressed with the implied undertaking simply cannot make use of those documents without the concurrence of the party from whom they were obtained or leave of the court. The implied undertaking protects documents or oral discovery obtained in earlier litigation from being used for any purpose “collateral” to that litigation. Thus, the documents cannot be used for internal strategic review in subsequent litigation. They cannot be used for the purposes of drafting pleadings. They cannot be sent to counsel for the purposes of obtaining an opinion in new litigation. All of these obligations bound the named defendants in the Current Action as well as ICBC in its conduct of that litigation.
(Chonn v. DCFS Canada Corp dba Mercedez-Benz Credit Canada, 2009 BCSC 1474 at para. 25, emphasis added).
 
Lawyers should inform their clients of the implied undertaking rule before document discovery and examinations for discovery commence. 
 
 
 
This book was written by Michael Dew, a Vancouver lawyer who practices civil litigation, including representing claimants in motor vehicle accident claims, persons who have been denied insurance coverage by insurance companies, and persons dealing with builders lien issues.