10/26/2026 3:41:12 PM | 3 minute read

Missing Evidence, Mandatory Inferences: Reading SS&C for Insurers

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Alex Huzik

Associate

Get in touch

Alex Huzik

Associate

In SS&C Technologies Canada Corp. v. Bank of New York Mellon Corp., 2026 SCC 29, the Supreme Court of Canada clarified the consequences of intentionally destroying relevant evidence. It was the Court’s first significant consideration of spoliation of evidence since St. Louis v. The Queen in 1896. The decision reconciles inconsistent approaches to assessing damages where evidence has been spoliated, providing guidance for all litigators. For insurers, it also reinforces the importance of early preservation requests and documented disposal decisions.

Background and Litigation History

SS&C supplied securities-pricing data to the Bank of New York Mellon (BNY) under a licence agreement. After discovering unauthorized sharing, SS&C demanded preservation of records showing how the data had been used. BNY refused. At the damages phase, the trial judge declined to decide whether an independent tort of spoliation applied but drew adverse inferences from BNY’s failure to preserve and produce evidence. The court found that unauthorized entities had used the data and that their use was more than minimal.

The Ontario Court of Appeal partly reversed the liability ruling, and also found spoliation, condemning BNY’s refusal to preserve records after receiving notice. However, it upheld the award. So, its recognition of spoliation did not resolve the missing information about the extent of that use and resulting damages.

The SCC found that the trial judge’s inferences largely repeated what the available evidence already established - that unauthorized use had occurred. They did not help quantify that use, leaving SS&C to bear the uncertainty caused by BNY’s destruction of the records. Thus, the Court returned the damages assessment for a new hearing, requiring meaningful adverse inferences to support findings about how many entities accessed the data, how often they accessed it, and the data’s value.

The SCC’s Decision

The decision clarifies that once spoliation is established, the adverse inference is mandatory to address evidentiary gaps and eliminate prejudice. The court can decide what inference the circumstances justify, but it cannot simply acknowledge the destruction and leave the innocent party to bear the resulting uncertainty. As the SCC put it, spoliators are “the authors of their own misfortune” and should not be permitted to profit from the evidentiary gaps they create.

To establish spoliation, a party must prove four elements on a balance of probabilities:

the evidence was intentionally destroyed, altered, mutilated, or concealed;
at the time of destruction, litigation was ongoing or reasonably contemplated;
the evidence was relevant to said litigation; and
it is reasonable to infer that the evidence was destroyed to affect the litigation.

The responsible party can challenge these elements or, once spoliation is established, rebut the presumption by showing that the evidence was not harmful to its case. If the spoliator cannot rebut the presumption that the destroyed evidence was harmful to its case, the court must draw adverse inferences.

However, the presumption does not dictate how or to what extent the evidence would have been unfavourable. SS&C argued that the court had no discretion and was required to draw the strongest possible inference against the spoliator, supporting its maximum damages claim. The SCC rejected that position. The scope of the adverse inferences remains a discretionary, context-specific determination, “best left to the trial judge who can consider all of the surrounding facts” (para. 84). At this stage, the spoliator may still present evidence to narrow those inferences.

Finally, the Court left two questions open: whether negligent destruction can constitute spoliation and whether spoliation is an independent tort.

Implications for Insurance Litigation

In insurance claims, evidence often passes through several hands before litigation begins. We have seen cases where an expert retained by the adjuster discarded an allegedly defective switch (Spencer v. Quadco Equipment Inc. and others, 2005 NBQB 2); the insurer arranged disposal of a fire-damaged truck before the defendants had an opportunity to inspect it (Triple 3 Holdings Ltd. v. Paccar Inc., 2014 SKQB 427); and an oil tank went missing while held by the engineering firm investigating the loss (Dupuis v. W.O. Stinson & Son Limited, 2019 ONSC 5762). These examples reinforce the importance of preserving evidence throughout the investigation, especially considering the adverse consequences clarified in SS&C, and remind insurers to extend preservation instructions to the experts and adjusters involved.

SS&C also reminds parties and counsel of the importance of requesting preservation early. For parties, an early preservation request serves two purposes. It helps protect the evidence and creates a record that the recipient knew of the dispute and the evidence’s relevance. In SS&C, BNY’s refusal to preserve usage records after receiving SS&C’s notice was central to the finding of spoliation. The preservation notice helped establish that litigation was reasonably contemplated. The SCC also stressed that disagreement with the claim did not justify destroying or withholding evidence.

For those receiving the request, the reason for any failure to preserve matters. In SS&C, the Court identified the reason for destruction and the spoliator’s culpability as relevant considerations when crafting remedies. Parties should document any decision to dispose of relevant evidence, including the reasons and preservation alternatives considered. If evidence is not preserved, they should be prepared to explain in detail why.