The Veil of Confidentiality
Some of us, including the author, have been involved in cases where the Metropolitan police have attended the public area of a civil trial, taking notes. Whilst it is not usual for participants in arbitration to be concerned about the attentions of the police, they may however have other legitimate reasons for wishing to avoid publicity to other parties or the world at large. Indeed, privacy and confidentiality between the parties is seen as a major attribute and benefit of arbitration (although perhaps wrongly, according to Lord Neuberger's recent speech). Nobody can just take their seat at the back of an arbitration room for the purpose of journalism, commercial benefit or even law enforcement, because the proceedings are closed to the public, absent contrary agreement of the parties.
However, just because arbitration proceedings are in private, it does not necessarily follow that they are also confidential, even though it is often assumed that they are. So, when can we be confident that confidentiality will apply to arbitration proceedings, and the documents associated with it?
Classes of Documents
What classes of documents are we discussing? Broadly, the categories would include i) arbitration pleadings; ii) documents disclosed in the course of the arbitration; iii) correspondence and written submissions; iv) witness statements, both lay and expert; v) notes and transcripts of evidence; and vi) the award. We are not discussing material that might attract quite separate privilege such as litigation privilege or solicitor/ counsel - client privilege.
The Arbitration Act 1996– a Change Coming?
The issue of confidentiality in arbitration has garnered significant public attention in recent years. Whilst the Arbitration Act 1996 ("the Act') provides a framework for arbitration in England and Wales and Northern Ireland, it currently does not contain any explicit provisions about confidentiality in arbitration.
In March 2021, some 25 years after the Act came into force, the Ministry of Justice asked the Law Commission to conduct a review of the Act to determine whether it was still fit for purpose and continued to promote the UK as a leading destination for commercial arbitrations. One of the key topics considered in the first consultation was the issue of confidentiality and the suggestion that the Act might provide a default rule that arbitrations are confidential, with a list of exceptions. Ultimately the Law Commission were not persuaded by this suggestion, instead concluding that the Act should not seek to codify the law of confidentiality, which they felt was better left to be developed appropriately by the courts case by case.
On this basis, the current position, absent new case-law, is likely to remain unchanged for the time being.
The Current Position – England & Wales
The arbitration and everything connected with it is generally assumed to be confidential on the basis that participation implies agreement to confidentiality between the parties. However, that is subject to certain exceptions, and consideration of these exceptions is still under development. The major London arbitral institutions have confidentiality, albeit not in identical terms, as part of their standard rules, which will therefore bind the parties agreeing to arbitrate. Although it is open to the parties to agree otherwise, that may not be possible to do unilaterally where the arbitration is being conducted pursuant to a contract which imposes London arbitration as a method of dispute resolution. In the majority of cases therefore, agreement to confidentiality will be implied as a term of the parties' arbitration agreement.
The courts have however provided some non-exhaustive exceptions (Emmott v Michael Wilson and Partners [2008] EWCA Civ 184), which in summary are:
- By consent of all parties, possibly implied and including consent by trade custom;
- Where there is a contrary Court order (but not as a general discretion to lift confidentiality);
- Documents or information in the public domain, e.g. because of litigation post-dating the arbitration, perhaps due to a challenge to the award or enforcement;
- In the case of an award, to the extent necessary to enforce it;
- The interests of justice, including in foreign proceedings, to avoid a subsequent tribunal being misled, not merely that it would be convenient to avoid wasted time or expense;
- Public interest.
Looked at practically, it is likely that some classes of documents are more likely to attract these exceptions than others. For example, contemporaneous documents that represent direct evidence in future litigation (e.g. service records of a ship that was alleged to be unseaworthy) might well be disclosable, even if they have only come into a party's possession via the arbitration. In contrast, expert evidence obtained purely within the arena of the arbitration, and disclosed to another party solely for that purpose, is less likely to attract an exception. Similarly, recordings or notes of oral evidence given to the tribunal, being in the very heart of the proceedings, seems unlikely to attract an exemption. But the difficulty with these exceptions (particularly given their non-exhaustive nature) means that a party's advisor is unlikely to be wholly confident of confidentiality.
International position
Thus far, we have only looked at domestic courts' decisions. Domestic courts do not have determinative influence over foreign courts, which may decline to make the same decisions as would be made here. With hundreds of possible jurisdictions, we cannot discuss them all, but for example, Sweden and Australia have rejected an all-encompassing veil of confidentiality. It is therefore possible, in the context of an international arbitration in London, that a party might be reasonably confident of confidentiality here, but not in a foreign jurisdiction. Nor is it necessarily always possible to know the position in advance by taking advice in that foreign jurisdiction (for example, where the arbitration relates to responsibility for a loss in a known foreign jurisdiction) because there might be unforeseen litigation in another jurisdiction, not necessarily involving the party seeking to enforce confidentiality.
Conclusion
To return to the main question: are documents exchanged in arbitrations confidential between the parties? If one wants to answer 'yes', then that answer would have to be peppered with so many exceptions that in reality, it is not a sensible one-word response. Parties and the lawyers advising them need to bear in mind the risk that London arbitrations may not be as confidential as some would like.
