INTERNATIONAL ARBITRATION 1/3LY
CONF IDENT I AL I T Y AND PRI V ILEGE : DO CL A IMANT S WA I VE PRI V ILEGE WHEN DI SCUSS ING THE C A SE WI TH THIRD - PART Y FUNDERS?
Are Confidentiality and Common Interest Agreements sufficient to protect privilege when discussing arbitration claims with potential funders?
WHAT IS PRIVILEGE? Arbitration often obliges a party to disclose documents relevant to its case, whether helpful or not. Being able to establish privilege in a document allows a party to withhold such documents fromproduction to a third-party, court or tribunal. If privilege is established, this will ensure that advice, such as the strengths andweaknesses of a case, between a lawyer and his client is kept confidential, allowing themanagement of the case to proceedmost effectively. The types of privilege that can be claimed under English laware: 1. LEGAL ADVICE PRIVILEGE: confidential communications between a lawyer and his client, which have come into being for the purpose of providing and receiving legal advice. 2. LITIGATION PRIVILEGE: communications between either a lawyer and his client or a lawyer / the client and a third-party, for the dominant purpose of litigationwhen litigation is pending, reasonably contemplated or existing. 3. COMMON INTEREST PRIVILEGE: this applies to documents which are otherwise privileged and are shared between parties who have a ‘common interest’. Whilst disclosure of a privileged document to a third-partywould ordinarily lead to the privilege being waived, by demonstrating a common interest, the privilege remains. MAINTAINING PRIVILEGE OVER DOCUMENTS PROVIDED TO / CRE ATED BY THIRD-PART Y FUNDERS Claimants do not necessarilywaive privilege when discussing a case with a third-party funder. Firstly, for privilege to be claimed the evidence in questionmust be confidential. However, disclosure of documents to a third-party i.e. a third-party funder, may lead to confidentiality being waived. It is therefore important that any documents provided to a funder are given on the explicit basis that the funder will keep all documents confidential; this can be done byway of a confidentiality and common interest agreement (see page opposite). A third-party funder is introduced into the relationship between a lawyer and a client for the purposes of furthering the possibility of litigation or arbitration normally at the due diligence phase before proceedings have been formally commenced to consider themerits and costs of legal action.
AN ANALYS I S OF BEST PRACT I CES .
BY DEEPA KHANDHIA , A SSOCIATE AT CLYDE & CO LLP
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