The Considerations of Confidentiality, Privilege and Ethics in Dispute Resolution

This essay seeks to discuss some of the ethical issues that practitioners of dispute resolution processes need to consider for them to avoid the pitfalls of impartiality. The write up will examine the three key considerations of confidentiality, privilege and ethics. The essay will then conclude by examining some decided cases. Arbitration is a usually (but not always) private process of adjudication in which parties in dispute with each other choose decision-makers (sometimes one, often a panel of three) and the rules of procedure, evidence, and decision by which their dispute will be decided.

Introduction

Arbitration as one of the alternative dispute resolution (ADR) mechanism is used where an agreement cannot be reached, essentially to narrow the issues being discussed. Arbitration has in recent years come under a lot of criticism with scholars and practitioners shinning the light around how a variety of legal, ethical, jurisprudential, and sociological issues make use of the arbitration process most especially that the arbitration has gravitated from its primary historical form as a method of consensual dispute resolution between repeat player commercial parties to contractually mandated forms of decision-making in disputes. These disputes range from consumers and banks, hospitals, schools, employers, airlines, securities sellers, and merchants of all magnitudes and forms.These multiple variations and forms of arbitration in increasingly diverse contexts raise very significant issues about the fairness, justice, and ethicality of the functioning of arbitration processes. There appears to be an ‘inaudible voice’ that invariably brings about the discussion on ethics of arbitration, both in formal regulation, and other forces capable of influencing lawyer behaviour. Arbitration as an alternative dispute resolution (ADR) mechanism most needs to be couched in some form of rules, procedures, transparency, disclosure, sanctions, and consequences if it is to be viewed in some light of impartiality. These are the factors that give arbitration the legal legitimacy as an efficient alternative to the court settlement process.

Confidentiality

Primarily, practitioners of ADR processes like arbitration are required to act in good faith at all times and maintaining confidentiality is one key aspect of acting in good faith. Confidentiality means that which is confidential both as between the parties as well as between the parties and the arbitration practitioner. Confidentiality is generally maintaining private and secret, all discussions; the contents of documents disclosed that will not be used as evidence; and information provided during the ADR process. Confidentiality is primarily the contractual right and obligation, express or implied under the arbitration agreement, augmented by the common law, equity and statute.In fact in deciding whether or not to use arbitration, one of the most often examined question has to do with efficiency resulting from speed and low cost. However, many parties often cite confidentiality as the main driver of the decision. For instance, in intellectual property and high technology cases, as well as some more personal matters of sexual indiscretion, parties are more desirous to resolve disputes without getting the public peeking into the details of a trade secret or a proposed business plan or a confidential fact.

Maintaining confidentiality encourages meaningful participation and enhances good outcome. It is often viewed that respecting confidentiality encourages a full and frank discussion between the parties about the issues in dispute and this can assist with the resolution of the issues. A practitioner has an ethical obligation not to disclose information obtained during a private session unless clearly instructed to do so by a party or where disclosure is otherwise required by law. In other words, what is said or done during arbitration cannot be admitted as evidence in any hearing before a tribunal or any court unless the parties to arbitration agree. In fact, an arbitration agreement will bind the parties as well as the third party neutral appointed pursuant to it. Generally, courts will lend their support to upholding confidentiality except where it is necessary in the interest of justice for the evidence to be given.

Ethics

Consent is the driving force behind arbitration, and it has often been asserted that it is incorrect and unethical to enforce arbitration clauses on those who have not willingly submitted themselves to the process. Therefore, lawyers and sometimes judges who attempt to hold disputing parties to clauses they did not knowingly submit to are held to behave unethically and inappropriately. In fact many commercial contracts now require or strongly recommend that parties go to arbitration before allowing a case to be placed on the trial docket. This is perfectly logical because if the parties do not like what happened in the arbitration they usually have the right to a trial de novo. Further, there is a debate about whether or not there is a conflict of interest in the arbitration role where arbitrators are selected by parties and thus must impress the choosing parties sufficiently to be chosen again, especially if the arbitrator is in full time practice depending exclusively on arbitration for income.Conflict of interest is another ethical issue that arbitrators need to wary about. Particularly, arbitration practitioner is expected to disclose all relationships they have had with the parties to the arbitration.

One of the areas that a practitioner ought to look out for is the temptation to hold ex parte communications with either party in the arbitration. While it is not advisable to arbitrarily appoint arbitrators repeatedly some arbitrators are repeat players for the very reason that they possess massive experience in the matters under contention.

Privilege

Privilege in relation to arbitration means that if statements are made without prejudice, their contents cannot be put in evidence without the consent of all relevant parties. In litigation privilege will often relate to an offer of a compromise, or a without privilege save as to costs letter. It is however perfectly normal to have some settlement discussions on record and others w off the record and in this case part of the discussion will be privileged but the rest of it will not be. The basis of the principle of without privilege is that parties ought to be encouraged, as far as possible, to settle their disputes without resorting to litigation and should not be discouraged in their negotiations by knowledge that anything that is said in the course of such negotiations may be used to their prejudice in the course of a legal proceeding. A tribunal can decide to admit or exclude evidence based on privilege. The tribunal should respect applicable rules of privilege or professional ethics and other legal impediments.

In an arbitration in which there is the possibility of differing privilege laws applicable, an arbitrator, should apply a ”most-favored nation” approach and apply the privilege law with the most protection equally to all parties. When the parties, their counsel or their documents would be subject under applicable law to different rules, the tribunal should to the extent possible apply the same rule to both sides, giving preference to the rule that provides the highest level of protection.” And always, a civil law party to an arbitration that employs the most favored nation approach could waive the protection afforded by the tribunal and use the material should it be necessary to do so, just as the common law party could.

According to Rachel Reiser, the primary concern of this policy must be to protect the secrecy of documents thought to be confidential when they are made; that is, applying privilege to documents according to the party’s expectation that they receive privilege. Further, according to Richard Levin, fairness in a privilege issue implicates directly the expectations of the parties. He opines that a tribunal’s decision to apply no privilege to either party (the least favored nation approach) would of necessity be unfair to the party who created a document or evidence with the expectation that it be kept in confidence. In this regard, it is unlikely that protecting documents that were not initially thought to be protected by privilege would violate any public policy, especially when attempting to treat both parties equally, which is the hallmark principle of arbitration practice. A point to note here is that this is not even addressing the policy of the attorney client privilege itself, that by allowing otherwise privileged documents to be disclosed subsequently in an arbitration may have the effect of parties simply not seeking legal advice in the first place.

Conclusion

To sum up, this essay has discussed the ethical issues that practitioners of dispute resolution processes need to consider in order to avoid the pitfalls of impartiality. There have been examined the three key considerations of confidentiality, ethics, and privilege.