Confidentiality in the courts – protecting sensitive information

The courts expect an open approach to disclosing information in court proceedings in order to promote open justice. But commercial parties may be reluctant to use litigation if it requires them to disclose commercially sensitive information. The courts balance these competing interests in a variety of ways.

The principle of open justice

Open justice means that the legal process should take place in public and is a fundamental principle of English law. In practice, it means that civil litigation parties are expected to reveal the evidence they plan to rely on to their opponents before any trial takes place. It also means that the public (including the media) have access to court files and can observe court hearings.

This cards on the table approach to litigation helps to encourage settlement and create a level playing field, while public scrutiny of legal proceedings enhances public confidence in the legal system and helps to ensure a fair trial.

However, it can also present problems for litigants. An intellectual property dispute, for example, may require parties to analyse how each other’s products work to see if their protected designs have been unlawfully copied. Making such information available, whether to (potential) competitors, or to the public, could damage the disclosing party’s position in the market.

How do the courts protect sensitive information?

The risk of confidential information becoming known to competitors arises at various stages. Practical solutions are often the most effective and are usually made by court order.

When issuing a claim

Most documents filed at court immediately become part of the public record. However, in certain circumstances litigants can file sensitive information in a schedule which is separate to the statement of case to prevent third parties gaining access to it without the court’s permission.

At the disclosure stage

During proceedings parties have to disclose information they rely on or which could undermine their or another party’s case. During disclosure, parties can confine access to what is strictly necessary, redact sensitive documents and provide them in hard copies only. Additionally, parties may set up a confidentiality scheme where access to specified confidential documents is restricted to approved individuals such as lawyers and expert witnesses.

At trial

Confidentiality can be maintained at trial by parties agreeing that they will not read out or refer to specified confidential information. As this applies equally to written evidence, parties must also be careful to restrict reference to confidential information in witness statements.

The limits of confidentiality in court

The balance between open justice and protecting confidential information can be difficult to strike and often comes down to a few key issues: what is the nature of the information; what is it required for; who needs to see it; and can justice be served if limits are applied?

Crucially, litigants must be aware that there is no certainty that confidential information will be kept out of the public domain. For example, in a recent case (NAB v Serco), a peripheral reference to a particular document in a witness statement was found to bring that document into the public domain.

As a result, many businesses choose to arbitrate rather than litigate, as arbitration is invariably conducted in private. Outside of the arbitration process, commercial parties should be prepared for the loss of a certain amount of confidentiality in their documents as the price to be paid for achieving justice in the English courts.

Ian Tucker is a partner, Tom Whittaker a solicitor and Lucy Metcalfe a trainee solicitor at Burges Salmon.