25 April 2014

Commercial parties invariably place a higher value on the confidentiality of their documents than the courts appear willing to tolerate. This reflects a difference in approach:

  • A commercial business wants to protect its thinking and operations from its competitors to preserve its position in the market.
  • The courts, however, approach their role on the liberal principle of open justice. Court decisions should be reached in public and in most cases that overrides a personal preference to keep the underlying issues to yourself.

So commercial parties in court litigation should expect at least some erosion of confidentiality in their documents. There are means of preserving confidentiality in some documents (including legal professional privilege) and within restricted groups in some cases. However, these mechanisms will not always be available and may only last for part of the proceedings (ie until trial).

The wider question is how extensive is the potential loss of confidentiality? Is it all documents which have to be provided in relation to a case or only those which are actually relied upon or discussed in court? The first point is that most documents prepared directly for the proceedings including the arguments of the parties can generally be obtained by any third party (including newspapers) unless there is an overwhelming need to keep them confidential. Equally, documents expressly relied upon at a hearing will normally fall into the public domain. However, it is less likely that documents provided to the court but not actually relied upon in a hearing or a judgment will lose confidentiality.

A recent case NAB v Serco has considered this point further. The Guardian sought documents which had been included in a hearing bundle in proceedings in which the newspaper was not involved. The documents had been peripherally referred to in writing by a witness in those proceedings whose evidence was not considered relevant. They were not referred to in court or in the judgment and apparently not actively considered by the judge. Had they come into the public domain?

Yes – the Guardian could have them and publish them. By being referred to by a witness – even peripherally and even in an irrelevant way – they were deemed to be part of the hearing and consequently to have fallen into the public domain.

On a wider scale this may concern commercial entities participating in court proceedings. This approach would put large numbers of documents which the court had forced the party to reveal into the public domain even when not relevant to the dispute. That may not seem to be a substantial problem from the point of view of open justice but businessmen may think otherwise about their competitiveness.

This risk is at the heart of many business’ wish to use arbitration, where confidentiality can be maintained. Outside of such alternative dispute resolution processes, however, commercial parties must seek to resolve disputes with their eyes open.

Ian Tucker is a senior associate in our Disputes and Litigation team and comments on emerging law from a litigation perspective.

Key contact

David Hall

David Hall Partner

  • Dispute Resolution
  • Banking Disputes
  • Business Crime and Regulatory Investigations

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