Module 3: Chapter 4: Evidence in Arbitration: Privilege and Disclosure

Evidence: Privilege and Disclosure

• This chapter explores how privilege and disclosure impact the use of evidence in arbitration
• Understanding privilege and disclosure will assist the arbitrator.
• Privilege and disclosure may lead to the exclusion of evidence based on extrinsic considerations, regardless of the evidence's reliability or relevance
• Focus on understanding the principles of privilege and disclosure rather than memorizing case details.

Learning Objectives

• Explain the nature of privilege, including the complexities of legal professional privilege
• Describe the rules relating to "without prejudice" documentation
• Explain the importance of written evidence
• Explain the role it plays in the arbitrator's ascertainment of the facts
• Explain the process of disclosure and how it varies between civil and common law jurisdictions

Background

• A client's right to confidential communication with their attorney is a fundamental right in most jurisdictions
• This prevents them from being forced to disclose their discussions, establishing the concept of privilege
• Documentary evidence relating to the facts in question exists in nearly all civil disputes and arbitrations
• Contractual documents, such as quotations, orders, delivery notes, and standard terms, are likely to exist in construction contract disputes
• Privilege is relevant when parties want to use documents for their case, as some documents and communications may be privileged
• Parties must provide advance notice of all documentation in their possession to their opponents as required by court procedures in most common law jurisdictions
• This process is called disclosure
• Privileged documents must be disclosed in the list of documents but do not need to be made available for inspection by the other party
• The party seeking to withhold inspection of privileged documents must state the grounds for doing so
• Practicing arbitrators need a clear understanding of privilege and how it may operate in different jurisdictions, especially regarding disclosure

Legal Professional Privilege

• There are two types of legal professional privilege:
• Arises from the attorney-client relationship, even without contemplated litigation
• Involves confidential communications connected to contemplated or pending litigation
• The privilege belongs to the client, not the attorney
• Attorneys have a duty to assert privilege unless the client waives it
• Limits exist on the type of advice given by party representatives that attracts legal professional or legal advice privilege
• General principles of privilege may apply to arbitration

Attorney and Client (Legal Advice Privilege)

• Legal advice privilege applies to confidential communications and evidence of those communications between a client and its lawyers
• These must be created to give or obtain legal advice
• Clients should be able to obtain legal advice in confidence
• Presentational or strategic advice related to a client's legal rights and obligations is included
• Advice of a purely strategic or commercial nature is exempt
• Legal advice privilege does not protect documents, such as internal memoranda prepared by employees or third parties
• There is a narrow legal definition of who the "client" is
• It does not apply to communications with third parties
• The existence or contemplation of litigation is wholly relevant to granting privilege under this category

Cases Defining Privilege Protection

• Minter v Priest: Communication must be confidential, made during the attorney-client relationship, or with the aim of establishing that relationship
• Balabel v Air India: Privilege is not restricted to specific requests for advice; extends to information passed to keep parties informed for future advice
• Re Sarah C Getty Trust: Communications in a professional capacity to give/receive legal advice are privileged, even if parts originate from a third party the attorney consulted
• Dubai Bank Ltd v Galadari: Privilege covers client instructions, counsel's opinion, documents created to instruct attorneys, and a selection of pre-existing documents that would betray the solicitor's advice
• In-house lawyers have equal protection with Legal professional privilege: Alfred Crompton Amusement Machines Ltd v Commissioners of Customs and Excise (No 2)
• Nederlandse Reassurantie Groep Holding NV v Bacon & Woodrow (a firm): Investment/patent/estate agent advice is not covered unless commercial wisdom of a transaction is directly related to a solicitor's professional duty
• Walter Lilley & Company Ltd v Mackay and DMW Developments Ltd: Advice from claims consultants is not covered

Communications Connected to Litigation (Litigation Privilege)

• Litigation privilege is attached to confidential documents created for the primary purpose of current or upcoming proceedings
• Including documents prepared by employees and third parties
• There is a distinction between confidential and privileged documents
• Not all attorney-client communications are privileged, even if confidential
• Privilege is void if a document loses its confidential status, emphasizing the need to maintain confidentiality in all privileged documents
• Statements from potential witnesses and experts are necessary in most cases
• The leading case is Waugh v British Railways Board, where the House of Lords held that routine accident reports were not privileged, because:
• Preparation of documents must be for litigation.
• Litigation usage was only one of the purposes for preparation.
• Informing of the board about the steps to prevent a similar accident was another purpose.

Dominant Purpose

• Ascertaining is not always easy and is ultimately for the court to decide on the facts of the particular case
• Accident reports are generally for the purpose of preventing recurrence
• In Re Highgrade Traders Ltd, the Court of Appeal held that an insurer who instructed fire investigation experts in a suspected insurance arson case was primarily concerned with the question of liability, not the prevention of recurrence; the report attracted privilege
• In Guinness Peat Properties Ltd v Fitzroy Robinson Partnership (a firm), the Court of Appeal held that the dominant purpose should be ascertained by an objective view of the evidence as a whole.
• The intention of insurers who procured the letter, to submit to lawyers to seek advice on whether the claim should be resisted, was examined.
• As such, the letter was regarded as privileged.

Disclosure Obligation

• Disclosure obligation relates to new documents created after the lists have been exchanged where the decision to create documents is critical
• Discussing the merits of proceedings in internal documents should be done carefully
• If new documents may be disclosed unless privileged, care must be taken
• Preparing subject matter dispute reports by internal or external lawyers should be done carefully to summarize legal advice

Discussions

• Any discussion documents between the parties aimed at reaching a compromise and settling the dispute will be 'off the record', meaning that they may not be used as evidence by either party
• Such documents are usually referred to, and labeled, as 'without prejudice' communications

Restrictions to Privilege

• Oral or written communications intended to seek settlement are privileged from disclosure, as confirmed in Chocoladefabriken Lindt & Sprüngli AG v Nestlé Co
• Under the rule, negotiations are encouraged by removing potential embarrassment by negotiations being used against the party at trial
• Even 'without prejudice' is not explicitly stated, the purpose of the communication must be to seek settlement
• Communications in ongoing negotiations under prejudice are privileged until one party states negotiations are over
• In Cheddar Valley Engineering Ltd v Chaddlewood Homes Ltd, the party's open offer over the telephone was not mentioned in the later negotiations, so the communications were held as without prejudice
• Without prejudice negotiations resulting in settlement indicate settlement terms
• Non-settlements mean communications are inadmissible, but are used in Interlocutory applications to strike proceedings seeking want of prosecution

Waiver of Privilege

• Legal professional privilege belongs to the client and can be waived by him or her
• Privilege attached to without prejudice communications belongs to both parties and can only be waived if both sides consent.
• Waiver may be explicit or tacit by disclosing a privileged document, or using it to refresh memory
• Secondary evidence/privileged document copies are admissible if the document was obtained by theft
• In Goddard v Nationwide Building Society, the court held that the party may apply for an injunction to restrain the use of such material
• Because a party possessed the documents may be important because they would otherwise be able to waive privilege
• The position in Guinness v Fitzroy, confirmed a party waived privilege inadvertently by privileged letter being copied by the plaintiff when was inadvertently left in a file after being inspected

Public Interest Immunity

• Some documents must be withheld from production
• This is based on the document disclosure being injurious to the public interest
• Documents which form part of a class of documents needing protection like cabinet minutes and local authority social work records. Documents needing protection due to the sensitivity of their 'contents', including diplomatic dispatches and documents relating to national security should be considered
• The responsible minister provides a certificate stating the grounds for objection and identifying the class the document belongs to
• The burden of proof will rest on the party seeking disclosure
• The court can inspect the document to determine its Immunity
• The court must balance the public interest in concealing the document against the public interest in the due administration of justice

Arbitration and Privilege

• Different classes of privilege can cause different problems for an arbitrator
• Arbitrators should be aware of recognized privileges and the potential prejudice if such evidence were admitted
• Arbitrators can admit what they choose in the absence of 'strict rules of evidence'
• Arbitrators following or not following rules pertaining to privilege are unlikely to be critiqued so long as natural justice rules are applied
• As a matter of good practice, it is suggested that arbitrators should act in accordance with protocol Judges and arbitrators must consider a document where privilege is claimed in order to decide whether to allow it into evidence
• Arbitrators should act the same way, but parties may prefer an independent person make the judgment

Written Evidence and Disclosure of Documents

• Written evidence plays a critical role in arbitration and documents provide the primary evidence
• Relevant documents are considered by the arbitrator matter that remains in the hands of the parties
• Material documentation relies on issues for the availability of relevant or material documentation are subject to detailed procedural rules known as the 'disclosure' of documents
• Documents identified, but are not provided to either party or the tribunal because they are 'privileged'

Parties, Internation Arbitration and Evidence

• Parties come to international arbitration from different legal backgrounds and cultures
• Parties often differ greatly in how documentary evidence is disclosed to either party
• This is prominent in different civil law jurisdictions (limited disclosure) and in common law jurisdictions (extensive disclosure)
• International arbitration provides a clear alternative with no disclosure and exhaustive disclosure

Disclosure

• 'Disclosure' refers to the stage of the process (parties disclose docs to each other that are relevant to the issues in dispute)
• A-It normally takes place after each party has set. out there the position in the statements of cases
• B- Discloser ensures that the parties show documents early on It consist of 3 stages Search- Parties undertake a reasonable and proportionate search for relevance docs including electrics ,with emphasis List- the list of documents is provided with the disclosing party, although relevant it does not need to be disclosed of privilege and Inspection of the documents

Impact of Disclosure

• Disclosure must be treated seriously, (impacts the outcome of credibility at trial)
• Parties need to discuss disclosures issues with another party

Disclosure Obligations and the Law

• A lawyer must ensure that proper disclosure is given.
• Principle: 'to uphold the rule of law and the proper administration of justice', and Chapter 4 of the Solicitor, England and Wales
• Make decision if parties should be disclosed in arbitration or not

IBA's Rules

• Agreement will arise for the obligation to disclose and will permit the parties to disclose matters
• The arbitration laws and rules will permit the parties of the trail run to decide all procedural and evidential matters, including whether, which, documents should be disclosed
• Institutional arbitral rules deal with disclosure
• No automatic right to disclosures if the tribunal has terminated not whether there should be any further disclosure
• Under both rules appropriate disclosure deemed only
• disclosure under the elements which applies to only supporting documents needed to be disclosed in the first

Arbitration and Disclosure

• If the party doesn't support , other party can get another tribunal to do a request
• The rule ensure the disclosure is remains focused and relevance Portrayed with fishing expeditions in course should usually is applied Applications can identify that the case material come from from the arbitral

The Obligation

• The obligation to those documents extends to The party's control
• which were in the party’s physical possession and documents to which a party Had a right to possession or right to inspect and take copies
• it might include documents with agency over a party
• It would involve documents held by agents subsidiary companies professional agents and ex- employees.

Document Standards And ESI

• Documents are not restricted but it can also apply ESI
• It could extend to metadata that is attached to document can I turn alter the

Guidance Considerations

• The rule apply on the arbitrator to to the the closure
• The parties can disclose to they allow the disclosure as well There might be a refusal or in general can only be drawn from there

Disclosure Orders

• Orders for disposal including orders for dispense
• And order to disclose for all the documents

Determinants

• Determine if the document may be raised by the parties statements or case cases
• With rules any applicable arbitration you will obtain an applicable arbitration party

Redfern Schedule

sets out documents sought Relevant and why it is relevant. And who is requesting the party It sets out questions:

• Documents
• Reason
• Tribunal Request left blank

Techniques to lower cost

• ICC Technique confirm which documents need to to be in force is an application
• The taking of procedure applies

IBA

• (The rules which used for different procedures reflect on the neutral, air side and fairness) Document defined is broad copy and electronic Parties should disclose it to them

Revision questions

• What are the two types of legal professional privilege?
• What is a 'without prejudice' letter?
• When is a 'without prejudice' document admissible?
• What are the two categories of public interest immunity?
• What are the three stages of the process in disclosure ofdocuments?
• What types of disclosure orders can be used and on what authority?
• What grounds for objection to disclosure may be used?
• How does a Redfern Schedule assist the arbitrator?