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Dispute Resolution Post COVID – Confidentiality in arbitration

  • Market Insight 21 June 2020 21 June 2020
  • Global

  • Coronavirus

Dispute Resolution Post COVID – Confidentiality in arbitration

What is left of confidentiality in arbitration and how to preserve it

When these authors commenced practice, confidentiality (and we will use the term confidentiality to also mean the term privacy) was one of the holy trinity of advantages that arbitration was said to give to participants over and above what might be achieved in some court settings. The other two members of the holy trinity were often said to be speed and cost, which we will address elsewhere.

Turning back to the days pre internet,  irrespective of whatever confidentiality provisions might have been agreed, arbitration was an inherently private act.  Proceedings were known to the participants and a few others and awards were seldom published. Arbitration tended only to reach the public gaze when awards were appealed or enforced in the courts, or in specific types of proceedings which were inherently public to an extent (e.g. Investor State cases).

The practical effect was that irrespective of whatever confidentiality clause had been agreed most arbitrations, particularly commercial arbitrations, remained private.

Gradually over the last 20 years or so that inherent privacy has been eroded. Institutions now commonly publish awards (with or without redactions) and there is considerably increased press interest in arbitration.  Indeed modern technology makes it much easier for proceedings to be recorded and shared and these authors have been involved in confidential cases where information about the case has appeared on social media, on an almost live basis.

But how does this relate to the post COVID environment which is the theme of these articles?

Well, while traditionally most arbitration hearings are held behind closed doors, post COVID it seems clear that there will be a greater use of online platforms for arbitrations where the parties and their lawyers are not physically present.

This raises a whole new series of issues concerning confidentiality in arbitration.

For those parties who become involved in virtual arbitrations there are a series of new questions that need to be asked, for example:-

  • How do we know if the online platform we are using is secure? We have all heard stories of “zoom bombing” and many of us have experienced it.
  • How do we know who is sitting and watching the proceedings?
  • How do we know whether an expert or witness has company while they give evidence or might be tempted to use prompts which would be visible in a typical physical hearing context?
  • Do we know if the proceedings are being recorded for use at some later date?

Some of these issues are part of a wider list of issues concerning confidentiality which is presently being addressed by society at large; and it is probably the case that technical solutions needed to resolve some of these issues are not yet commonly available. However, that does not mean that there are no steps which a prudent party cannot take in order to reduce the risks of unexpected publicity in and around its legal disputes.

So what can be done if you want to keep your arbitration private and confidential?

The first thing to do is to look at the terms of the contract, ideally at the time of drafting the contract.  You need to make sure that there is a clause which states expressly and unequivocally that the arbitration proceedings themselves should be kept confidential. It was once thought that simply having a general confidentiality clause in the contract would be sufficient but these authors have certainly come across situations where tribunals have considered that such a clause is insufficient to render the proceedings confidential.

The confidentiality clause needs then to be checked, at a minimum, against the law of the seat as well as the rules of the relevant arbitral institution. For example, as a matter of English law there is an implied duty of confidentiality in arbitration which will support any confidentiality provision in your contract. On the other hand in many other jurisdictions, there is no such presumption for international arbitration and hence your confidentiality provision should be more tightly drafted to ensure that it is effective in the absence of that presumption.

Turning to the rules and practices of the relevant institutions. Is it an institution that habitually publishes awards and if so in what form? Some institutions routinely publish redacted awards, but those redactions maybe insufficient to disguise the identity of the parties. Some institutions will name the parties, legal advisers and arbitrators but only with consent. However, this is often dealt with after the end of the proceedings when the parties and their lawyers may not have quite the focus on the procedures in the case that they might have had when the proceedings where at their most active. This can be an elephant trap for the unwary.  The safest course is to let the institution know at the start of the proceedings that you do not consent to publication of any award.

And then what about specific issues that may arise in Virtual Arbitrations?

This is not the place to set out a full protocol for confidentiality in virtual arbitration, but there are certain enquiries that one can make to ensure that there is the best chance of confidentiality during the course of the proceedings:

There are both legal and practical measures that can be taken to assist with confidentiality when circumstances allow. For example:

  • It is easier to maintain confidentiality when lawyers, the tribunal, witnesses and experts are conducting the virtual hearing in a business environment rather than for example from home or a hotel. Have you made enquiries as to what business premises are available to each of the participants?
  • Does the online platform you are using have a reputation for confidentiality and are you doing everything that can be done to use all of the technical tools that maybe available? For example, ensuring that all video conferencing is protected by passwords and other restrictions on access.
  • Are you comfortable in the way in which virtual attendance is being controlled?  You should ensure that virtual waiting rooms with gatekeepers are used routinely.
  • Have you put in place arrangements to ensure that witnesses and experts giving evidence do not have access to prompts - for example you might want to use a 360 degree camera  or alternatively ensure attendance of an administrator who can confirm the conditions in the room where the evidence is being given.
  • Do you want to provide a “clean” laptop for the documents which does not otherwise have internet access or any other relevant material stored on its hard drive.
  • Should you ask the Tribunal to adjust the oath or attestation to include confirmation of the circumstances concerning some of the issues identified above.
  • To the extent documents are being shared electronically is that being done through a secure platform that prevents use of the documents other than for the purposes of the proceedings? Have you taken steps to ensure that digital records are destroyed after the proceedings?
  • Turning to the award itself do you want the tribunal to make a determination that the award and the proceedings have been confidential? If so, you need to make sure you ask for it.

In conclusion, the issue of confidentiality and privacy has become more difficult to manage with the advent of modern technology. But that is all the more reason to make sure that you do take all steps available, if you do want to retain confidentiality.

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How can we help?

If you would like to discuss any of the points or issues raised in this article please contact us.

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