REUTERS | Christian Charisius

Shhh… it’s a secret!

At the Worshipful Company of Arbitrators’ Annual Master’s Lecture yesterday, Sir Vivian Ramsey, the judge in charge of the TCC, discussed the concept of confidentiality in dispute resolution. A copy of the speech should appear on the WCA’s website (as previous lectures have) but, in the meantime, here is a taster.

Sir Vivian focused on the concept of confidentiality and privacy in the three main types of dispute resolution: arbitration, mediation and the courts, touching very briefly on adjudication.

In essence:

  • Arbitration is a private (and confidential) process that produces a final decision.
  • Adjudication is a private process that produces a temporarily binding decision.
  • Mediation is privileged and confidential, but also private.
  • The courts are a system of open justice with no secrets (subject to some limited exceptions). It is dispute resolution in the public sector.

Where does the duty of confidentiality in arbitration come from?

Sir Vivian questioned where the duty of confidentiality in arbitration was derived from. He wondered whether the concept evolved in arbitration in the seventeenth century, when the idea of having a hearing in a private room first developed. Did the idea of meeting privately start the ball rolling on the modern concept of privacy? Has privacy now given way to a duty of confidentiality?

The concept of privacy has evolved into a concept of implied undertaking, whereby the parties agree that they will not disclose any documents from the arbitration (this includes the working documents as well as any documents disclosed throught the process).

Sir Vivian highlighted a number of instances where this implied undertaking may be breached. For example, if the parties to an arbitration seek relief from the courts, does the concept of confidentiality prevent a document being disclosed in those court proceedings? If the document is read out in court, does that mean it is no longer confidential?

If the parties want a court hearing to take place in private, they have to apply to the court for permission. Does that mean that the courts accept that privacy in arbitration extends to privacy in court proceedings which relate to arbitration? The parties may waive this duty of confidentiality.

Is there a duty of confidentiality in adjudication?

Adjudication is a private process, up to the point that the parties go to court to enforce or challenge the adjudicator’s jurisdiction. Sir Vivian advised that, so far, he has not been asked to consider an application for an adjudication hearing in court to be heard in private. He wasn’t aware of anyone else being asked either. He suggested that he wasn’t anticipating a flood of applications after the lecture, as no-one thinks adjudication and arbitration fall under the same rules.

What about in mediation?

Confidentiality attaches to a mediation because of the nature of the process, although this can be broken. For example, a mediator may be called to give evidence in court proceedings in exceptional circumstances.

How do court proceedings differ?

Generally, court proceedings are open and the parties must apply for that to be changed. The courts recognise the duty of privacy and confidentiality in arbitration and will follow suit, if requested by the parties to do so. If necessary, a party may seek injunctive relief to maintain privacy from an arbitration, although there may instances when privacy is breached before the injunction is granted.

A final thought

The concept of confidentiality varies in the different dispute resolution processes, but “open secrets” apply in all (except adjudication). As the number of court applications that involve arbitration, or materials derived from arbitration, increase will there be an increase in the number of confidentiality agreements entered into by the parties and the arbitrator, in the same way as currently happens in mediation?

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