Guide to Retention and Destruction of Closed Client Files, For Lawyers - Appendix 1

Sample File Retention Policy

This file retention policy is a sample policy only to assist lawyers in preparing a file retention policy. This sample policy should be adapted to suit the individual law practice. No one policy can cover all situations relating to all law practices. This policy is not intended to replace the lawyer’s professional judgment. When establishing a file retention policy the lawyer should consider both the circumstances of the lawyer’s practice as well as the Law Society Guide on File Retention.

1. Purpose

The purpose of this policy is to provide procedures for the closing, retention and disposition of client files.

2. Definitions

disposition of client files” means the final action taken with the contents of client files and includes destruction, transfer to the firm’s precedent bank and permanent retention.

client file” means the physical paper folder containing the physical documents related to the matter and/or the electronic folder or directory containing the electronic files, documents , data or information related to the matter (hereinafter referred to as “file”).[1]  

file destruction date” is the date on or after which a file may be destroyed.

lawyer” is the lawyer who has carriage of the file or another lawyer in the firm who has been assigned responsibility for the file.

3. Closing the File

3.1   When a matter has been completed, the lawyer shall review the file to determine if the file may be closed.

3.2    No file shall be closed unless:

  • the retainer has been completed;
  • a final account, if any, has been forwarded to the client;
  • all accounts have been paid or forgiven;
  • there is a final distribution and accounting of all trust balances relating to the file;
  • client property has been returned to the client;
  • there are no outstanding undertakings or trust conditions.

3.3   Prior to closing the file, unless otherwise agreed, client documents shall be returned to the client.

3.4   At the lawyer’s discretion, copies of client documents may be retained in the file.

3.5   At the lawyer’s discretion prior to closing the file, the file shall be stripped of the following:

  • duplicate copies of documents;
  • draft copies of documents unless the history of creation of the document might be an issue in the future;
  • any documents that can be reproduced from another source such as pleadings, copies of registered deeds or mortgages.

3.6   Prior to closing the file, at the lawyer’s discretion copies shall be made of any documents that may be used as precedents and placed in the firm’s precedent bank for future use. The lawyer will ensure that such precedent documents are stripped of all personal information within the meaning of The Personal Information and Electronic Documents Act (PIPEDA) and that client confidentiality, in accordance with the Rules of Professional Conduct, is maintained with respect to any other information that identifies the client.

3.7   No file shall be closed unless the lawyer reviews the file and determines whether the file is appropriate for destruction at a future date or whether the file should be retained permanently.

3.8   If the file is appropriate for destruction, the lawyer shall establish a date for the destruction of the file (“file destruction date”).

3.9   No file shall be closed unless a letter has been forwarded to the client by ordinary mail or delivered to the client advising the client that:

  • the matter has been completed;
  • all documents and property belonging to the client have been returned to the client or alternatively confirming any arrangement between the lawyer and the client regarding the storage of the client’s property;
  • the law firm may store the file off-site and if the client requires copies of documents from a file stored off-site, an administrative fee will be charged to retrieve the file;
  • in accordance with the law firm’s policy, a file destruction date has been established and the file will be destroyed on or after the file destruction date without further notice to the client.

3.10   If documents from the file are returned to the client, copies shall be made of all documents that cannot be readily obtained from other sources or that in the lawyer’s judgment the firm may require in the future.

3.11   When the file is closed, the file shall be moved from an active status to an inactive status.

3.12   The firm shall maintain a list of closed files including the date that the file was closed.

4. Establishing the File Destruction Date

4.1   If the lawyer determines that the file is appropriate for destruction at a future date, the lawyer shall establish:

  • a file destruction date no earlier than fifteen years after the date that the file is closed; and
  • a date for the review of the file no earlier than 90 days prior to the file destruction date (“file review date”).

4.2   If the lawyer determines that the file is to be retained permanently, the lawyer shall establish periodic review dates in order that the lawyer may review the file to determine whether circumstances have changed and whether the file is appropriate for destruction.

4.3   The lawyer will exercise professional judgment in determining whether a file is appropriate for destruction and in establishing a file destruction date. In making these decisions, the lawyer shall consider:

  • the length of time that the lawyer is required to retain documents pursuant to specific laws or regulatory provisions;
  • the client’s age and capacity;
  • the likelihood that the lawyer or law firm will require the file for the future representation of the client;
  • the length of time that the lawyer or law firm may be liable for claims involving professional negligence; and
  • the likelihood that the lawyer or law firm will require the file because of the nature of the matter, the outcome of the matter or the fact that the file involved a difficult client.

4.4   All file destruction dates and file review dates shall be entered into the firm’s tickler system.

5. Retention of Closed Files

5.1   Closed files shall be stored in facilities that are physically secure so as to maintain client confidentiality and to protect against damage or loss.

6. File Destruction

6.1   The lawyer shall review the file on or after the file review date and prior to the file destruction date to determine whether circumstances have changed since the establishment of the file destruction date and whether the destruction should proceed.

6.2   All destruction of files shall be conducted in a manner that ensures the maintenance of client confidentiality.

6.3   A list or database of destroyed files shall be maintained.

6.4   A record of destruction or disposal shall be maintained. The record shall include the following information: the name and address of the client, the file number, a brief description of the matter, the file closure date, the file disposition date, and the name of the lawyer who authorized the file disposition.

 


 

 

Sample File Retention Policy For Medium And Large Law Firms

The Law Society acknowledges the assistance and input by various representatives of large law firms in the preparation of this sample policy.

Note: No one policy can cover all situations relating to all law practices or practice areas. This sample policy should be adapted to suit the particular circumstances of each law firm and is not intended to replace the lawyer’s professional judgment or the views of a law firm’s professional standards or other practice management committees, risk management partners or general counsel. When establishing a file retention policy, the law firm should consider both the circumstances of the law firm’s individual and group practices as well as the Law Society Guide to Retention and Destruction of Closed Client Files.

Background

This sample file retention policy addresses a number of file retention issues that may be unique to medium and large law firms, most notably:

  1. the large number of lawyers who may be working on any given matter or for any given client;
  2. the large number of practice areas within a medium or large law firm;
  3. the use of document management systems to electronically store draft and final versions of documents created for the client;
  4. the use of email management systems to electronically store or transmit correspondence and documents among lawyers, the client and third parties; and
  5. other resources which a medium or large law firm may deploy for the purposes of file and records management and document retention and destruction (for example, records management personnel, document production personnel, scanning technologies, automated records retention systems, errors and omissions partners/committees and practice management and professional standards committees).

In most instances, the nature of the retainer is such that the law firm is being retained for legal advice and to create documents for the benefit of the client which are “owned” by the client (for example, contents of minute books, share certificates, transaction documents, litigation pleadings, legal opinions, documents to be filed or registered with a governmental authority, wills, deeds and conveyancing documents, etc.). In the normal course of a matter, the law firm will have provided the client with copies of all relevant documents relating to the matter at all stages of their production, including draft documents for their review, copies of correspondence to or from third parties and of course final versions of transaction record books, litigation pleadings, contracts, wills or other final work product contemplated by the retainer.

Law firms should communicate their file retention policy to the client at the time of retainer and include a copy or a summary explanation of it with the initial or early correspondence to the client. Law firms may wish to post their file retention policy on their website and direct their clients’ attention to it. Law firms may also wish to communicate their file retention policy to the client when the file is closed along with any final reporting or disengagement correspondence.

In practice, both the client and the law firm operate on the understanding that, upon the closing of the matter, the client will want to receive from the law firm: (a) all of its property that it may have provided to the law firm during the course of the retainer or matter, and (b) all documents created for the client by the law firm as contemplated by its retainer. The client may further understand that the remainder of the law firm’s files will be available to it for some period of time after the matter has closed (for reference, due diligence, liability and other reasons).

For medium and large law firms, the time to return to the client documents not already returned and the time to determine the retention period for the remainder of the law firm’s file is at the time the matter is closed.

1. Purpose

1.1 The purpose of this policy is to provide procedures for the closing, retention and destruction of client files maintained by the law firm.

2. Definitions

2.1   In this policy, the following terms have the following meanings: “client’s property” has the meaning given to it in Section 3.2(e).

“file” means the aggregate of all paper and electronic documents and any non- documentary items relating to a particular client matter.

“file closing date” means the date on which the matter-responsible lawyer has determined that the matter has been completed and from which the file destruction date is determined.

“file destruction date” means the date on or after which a file may be destroyed.

“matter-responsible lawyer” means the law firm lawyer who has been assigned primary responsibility for the matter.

 

3. Reviewing and Closing the File

3.1 When a matter has been completed, the matter-responsible lawyer shall determine the file closing date and the file destruction date.

3.2 The matter shall not be closed unless:

  1. the retainer has been completed, including the sending of a reporting letter or disengagement letter where appropriate; [2]
  2. a final account, if any, has been forwarded to the client;
  3. all accounts have been paid or written off;
  4. there is a final distribution and accounting of all trust balances relating to the matter;
  5. the law firm has returned or delivered to the client all property that the client provided to the law firm during the course of the matter together with all documents or other property that the law firm was retained to produce in connection with the matter (collectively, the “client’s property”), other than any property belonging to the client that the client has instructed the law firm to retain on its behalf after the matter has been completed; and
  6. there are no outstanding undertakings or trust conditions.

3.3   At the end of each matter, each lawyer or other professional who has been involved in the matter shall review his or her portion of the file to determine whether there is any remaining client’s property that should be returned to the client. [3]  

As contemplated by Section 3.2(e), the remainder of the file in the possession of the law firm will not contain any client’s property other than client’s property that the client expressly instructed the law firm to retain and store on its behalf after the matter has been completed (e.g. seals, minute books, share certificates, wills, etc.).

3.4   At the end of each matter, unless the matter has been subject to a confidentiality or other information screen, each lawyer or other professional who has been involved in the matter shall review his or her portion of the file to determine whether there are any documents that should be used as precedents and placed in the firm’s electronic precedent repository for future use.

3.5   Before closing the file and sending any physical documents or other property from the file to offsite storage, each law firm professional who has been involved in the matter should arrange to have the file stripped of:

  1. hard copies of documents that have been imaged or otherwise saved in the firm’s electronic document repository; and
  2. any documents that can be retrieved or reproduced from another source (such as documents filed in a public registry, copies of cases, etc.).

The law firm may also delete duplicate copies of electronic versions of documents that have been saved in the firm’s electronic document repository.[4]

3.6   When the file is closed, the law firm shall note in its records that the file is a closed file.

3.7 The law firm shall maintain records that identify its closed files, including the file closing date and, if applicable, the file destruction date.

4. Retention of Closed Files

4.1   Closed files shall be stored in facilities that are physically secure so as to maintain client confidentiality and protected against damage or loss.

5. File Destruction

5.1   When the matter-responsible lawyer closes the file in accordance with Section 3, and if the file is appropriate for destruction (see Section 5.2 below), the file destruction date shall be determined based on the firm standard as defined in Section 5.2 unless the matter-responsible lawyer has determined that a different file destruction date would be more appropriate for the file.

5.2   The law firm retains closed client matter files primarily to satisfy risk management concerns. Accordingly, it is prudent to retain the closed matter file for a time period based on the limitation period during which claims might be advanced against the law firm.[5]

If in doubt, the matter–responsible lawyer should designate the longest applicable retention period and file destruction date. The file destruction date for most files shall be [fifteen (15)] years after the file closing date set by the matter-responsible lawyer. [6] A different file destruction date should be set by the matter-responsible lawyer depending on the circumstances of the file or in situations where the Limitations Act, 2002 (Ontario) sets a different time period for potential claims made against the law firm. For example, the matter-responsible lawyer shall consider a different file destruction date if any of the following circumstances apply: [7]

  1. files involving a client who is a minor: set the file destruction date to be fifteen (15)] years after the client reaches the age of majority;
  2. files involving a client who is mentally incapacitated: indefinite retention period, subject to review after [fifteen (15)] years;
  3. files involving the drafting of wills or trusts: indefinite retention period, with a recall period based on the client’s individual circumstances; [8] and
  4. files involving family law arrangements: indefinite retention period, subject to review after [fifteen (15)] years.

 5.3   The file destruction date shall be suspended in the event of any of the following that relate, directly or indirectly, to the matter: (a) an actual or potential errors and omissions claim made against the law firm, (b) a discovery request relating to the client or the law firm, (c) disputes concerning the law firm’s professional fees, (d) complaints made to the Law Society, (e) audits, and (f) governmental investigations. This may be ordered by any one of the matter-responsible lawyer, the errors and omissions partner/committee or a member of a practice management or professional standards committee.

5.4   The file destruction date may be postponed at any time if otherwise appropriate (for example, in the event that all or part of the original matter becomes active again or is relevant to a new matter).

5.5   This policy shall be applied in a manner so as to ensure that client confidentiality is maintained and that there is compliance with all applicable federal and provincial privacy legislation.

5.6   The law firm shall maintain a record of destroyed files which shall include the name and address of the client, the file number, a brief description of the matter, the file closing date, the file destruction date and the name of the matter- responsible lawyer.

 

 


1. Electronic data and information may include email, draft versions of documents on a server or document management system, scanned/imaged documents, faxes (where there are no paper copies),voicemail, metadata and any other information or data relating to a matter saved and stored in electronic form (e.g. on servers, magnetic media, magneto-optical systems, compact discs, DVDs)

2. It is considered best practice to send the client a reporting letter or disengagement letter which formally indicates to the client that the retainer is at an end, that no further documents will be provided to the client unless requested and that any remaining documents in the file will be destroyed in accordance with the law firm’s document retention policies and procedures.

3. The law firm may wish to make appropriate copies of all client’s property being returned to the client before doing so, unless copies of such client’s property may be readily obtained from other sources (including the law firm’s electronic document repository). To help avoid any possible confusion or disputes at a later date, the law firm may also choose to keep a record of the client’s property that was returned to the client.

4. The latest versions of certain email management and document management systems either prevent the saving of duplicate documents under different author names or they have the capability of purging duplicate documents after a matter has closed. This is mainly to save server space but it also accomplishes the same function as stripping the duplicate copies of hard copies of documents in the paper file.

5. Because original documents (such as trade-mark registrations) or client property (such as wills) are required for other purposes, they should not be kept with the archived or offsite closed matter file.

6. When determining an appropriate file destruction period, consider the various factors set out in the Law Society Guide to Retention and Destruction of Closed Client Files under the heading “Determining the File Destruction Date”. Generally, based on the provisions of The Limitations Act, 2002 (Ontario), an appropriate retention period for client files is fifteen (15) years after the file is closed. This time period is not a rule and it may not be appropriate for all client files. Lawyers should use their own judgment when establishing destruction dates for client files based on the circumstances of the individual client matter, the client’s needs and the needs of the law firm. Remember as well that other jurisdictions (provincial, federal and international) will have different limitation periods and law firms operating or doing work in multiple jurisdictions will have to consider such other limitation periods when establishing their firm-wide file destruction periods.  Shorter file destruction periods may be appropriate for some law firms in some practice areas based on a risk management assessment of the nature of their matters and the content of their files. Note also the judgment of the Ontario Court of Appeal in York Condominium Corp No 382 v Jay-M Holdings Ltd (2007), 84 OR (3d) 414 (CA).  By reason of this judgment, it appears that it is only as of January 2, 2019 that claims discovered after January 1, 2004 based on legal services rendered on or before January 1, 2004 will be barred by section 15 of The Limitations Act, 2002 (Ontario).

7. For the circumstances listed in Section 5.2, it is recommended that such files be periodically reviewed to determine if there is a change in circumstances that may justify the setting of a new or different file destruction date. Consider setting a file review date at the time the file is closed. In addition, while the circumstances listed in Section 5.2 have been broadly defined, law firms may wish to further refine them to the specific nature of the potential claim that has or might have a limitation period exceeding fifteen (15) years.

8. For example, the file of an 85 year old client should perhaps be re-evaluated after fifteen (15) years, whereas for a younger client, the dormancy period may be longer.  Retention of the file should be re-evaluated when an event occurs that may affect the length of time for which the file should be kept:  for example, if the client requests that his or her will and file be transferred to another law firm, or when the client dies.