The idea of Legal Professional Privilege (LPP) is one of the core concepts of the different legal systems worldwide. It has a different connotation in common law jurisdictions (legal professional privilege) and civil law jurisdictions (professional secrecy). The concept of Attorney-Client (United States)/ Legal Professional Privilege in the domestic sphere is relatively straightforward because the law is mostly clearly laid down and litigants and judicial bodies can clearly identify and refer to the law of Legal Professional Privilege with enough certainty. However, the law of privilege in the context of international disputes particularly in the context of international arbitration gives rise to various complications due to many factors. Most significant of them is the fact that there is no clear set of laws that apply universally irrespective of parties and jurisdictions. Moreover, it is difficult for the tribunal to find a clear approach as to determining which particular set of laws would be most suited the effective resolution of the dispute in hand.
According to Arbitral Practice and Legal Doctrine there are mainly three reasons why legal issues related to privilege determination in international arbitration are regarded as diverse, complex and disputed. These are:
a) The nature and concept of Legal Professional Privilege is different in civil law and common law jurisdictions worldwide;
b) There are essential differences in the qualification of privileges as substantive or procedural matters in common law and in civil law jurisdictions;
c) There are no established conflict-of-law rules for the determination of the law applicable to Legal Professional Privilege privileges in International Arbitration.
The emphasis of my research is on the status of Legal Professional Privilege or Professional Secrecy in International Arbitration. The research questions are:
a) What are the main concerns related with Attorney-Client/Legal Professional Privilege in International Arbitration?
b) How can arbitrators choose the applicable law of Attorney-Client/Legal Professional Privilege in International Arbitration?
This research will show the key approaches which arbitral tribunals may take to resolve this complex issue of Legal Professional Privilege in international arbitration, drawing upon the existing guidance of international institutional and procedural rules, national laws and theoretical bases for Legal Professional Privilege in all legal systems. I will finish my research by presenting some proposed solutions which would likely help arbitrators to reach a reasonable and sustainable resolution to any privilege dispute.
Legal professional privilege in international arbitration involves many complex issues. The nature of the proceedings in international arbitration is quite different than domestic proceedings. A unique approach is required to tackle the issues of privilege in international arbitration. At the same time the very essence of the concept of legal professional privilege needs to be respected. The concept of legal professional privilege underpins basic principles of rule of law and fundamental policy objectives of different states. All those principles and policies need to be understood properly before dealing with privilege claims. Arbitrators should also consider the purpose of arbitration and its function as a forum for dispute resolution. The expectations of the parties are of paramount importance. At the same time as an alternative forum for legal remedies the arbitration should adhere to the fundamental principles of rule of law. Equality between the parties, fairness of proceedings and need for certainty are the key concepts that the arbitration tribunal must uphold as a judicial body. Any claim of legal professional privilege must be considered in light of the above mentioned principles.
Arbitrators can exercise a great deal of discretion when dealing with privilege issues. This discretion can be limited by the content of the agreement between the parties. Besides parties’ agreement there are two factors which limit arbitrators’ discretion i.e. right to a fair hearing and party autonomy. When deciding whether to exclude evidence on privilege ground, the arbitrators must remember that exclusion of evidence might mean exclusion of justice. So the claim of privilege must be considered with utmost care. If the arbitrators give an unjust award however, it may be challenged. Excluding evidence because of a valid privilege claim does not mean the exclusion of justice. In case of privilege justice requires the particular evidence to be excluded.
When the parties enter into an agreement to arbitrate they select a particular brand of justice. This brand of justice provides greater emphasis on a flexible and efficient procedure where party autonomy will prevail and basic principles of fair trial will be observed. Striking a balance between these principles is a challenging task and the arbitrators should take the approach of fact based determination. This approach empowers the arbitrators with sufficiently broad discretion to provide a just outcome.
Arbitrator should consider if the issue of privilege can be avoided by some other means. For example, if the evidence concerned is found to be irrelevant to the case at hand or if it is redundant then the arbitrators need not entertain any privilege claim. Another way of dealing with a claim of privilege will be to transfer the issue of privilege to the court. A party can be allowed or encouraged to seek the assistance of the court to determine the privilege issue. However, if the arbitrators take such a step they should keep in mind the negative impact it might have in the arbitral proceeding. It can cause significant delays in the proceedings, extra costs and other inconveniences.
When determining the scope of privilege, the arbitrators should do it with flexibility and remember that there is more than one way of solving the matter. The very nature of international arbitration allows it to move away from strict conflict of laws analysis and find a creative solution.
The concept of equality between the parties does not necessarily mean that one single body of law should apply to both of them. In order to achieve true equality, the tribunal can use different laws and tailor them to the needs of the specific information in relation to which privilege is claimed. The parties and their counsel come from different legal backgrounds and their expectations differ. The tribunal should thoughtfully consider those legal context and expectations. It should try to balance various rights and duties of the parties that derive from their respective national law.
The best way to protect the legitimate expectations of the parties is to apply the minimum standard of privilege that upholds both parties’ expectations. This minimum standard will guarantee equality and fairness of the proceedings. It is also necessary to ensure the proper enforcement of the arbitration award. The tribunal should consider the purpose of privilege and the implication of disclosing confidential information. Disregarding the law of privilege can have an adverse impact on the parties and their businesses. It can also have an impact on the jurisdiction. If necessary, the tribunal can have the document inspected by an expert to determine its privilege status.
Once the applicable law for arbitration has been selected and a party refuses to disclose any information on the ground of privilege, the first step the tribunal should take is to determine whether that information satisfies the criteria of privileged information under the selected law. The tribunal should determine the nature of privilege in relation to the particular case that is to say whether the privilege is matter of right or a matter of duty. If it is a right, the parties should be considered to have waived that right if they do not claim privilege in a timely manner. But where it is a duty, the tribunal should be much more thoughtful when deciding that privilege will not be allowed. It should consider the possible consequence of the disclosure of information where the mandatory law sets a positive duty of non-disclosure. The tribunal should take it into account that if parties and their lawyers are in breach of the national law and do not abide by the privilege standard properly then there can be criminal sanctions. However, the information concerned should be properly examined. It can very well be the case that it is already in the public domain and it has a significant bearing on the case at hand. Therefore, the tribunal must weigh up several factors when dealing with a claim of privilege.
The parties should be asked to justify their privilege claim. The parties should convince the court as to why privilege should apply in relation to each and every document. The opponent counsels should also be allowed to object and to ask for more explanation or clarification. Parties should be allowed adequate time to respond. The parties must put forward persuasive arguments as to why document should be protected. This analytical approach would also discourage the parties from making unfounded claim of privilege. It would reduce the number of privilege allegation and the tribunal would be able to entertain privilege issues much more efficiently. It will also cut the tribunal’s expenses and save time. The tribunal will not require employing expert to decide the matter and the proceedings will move forward smoothly.
The UNIDROIT principle suggests that if a party fails to establish a proper case of privilege and yet does not wish to disclose information then the tribunal has the power to make a judgment by default or draw an adverse inference. The UNIDROIT principle states: “The court should consider whether these protections may justify a party’s failure to disclose evidence or other information when deciding whether to draw adverse inferences or to impose other indirect sanctions.” “The court should recognize these protections when exercising authority to impose direct sanctions on a party or non-party to compel disclosure of evidence or other information.”
If the document remains controversial and a court is in doubt as to whether or not privilege will apply, it can review the document itself in certain jurisdiction. But since, in international arbitration there is no third party like a jury who take the decision, the tribunal cannot view the document as it is the decision maker. Because if the arbitrator views the document and decides that it is privileged then he cannot simply forget what he has seen and it will prejudice his decision making. It is quite possible that his judgment will be influenced by the contents of that document. As a solution to this, the tribunal can appoint an impartial person to review that document. This can be a person with legal knowledge, an expert, retired judge or even another arbitrator who will not decide the case.
The main goals to achieve in relation to the laws of privilege in international arbitration are to ensure equality between the parties, fairness of the proceedings and predictability. Much of the complexities can be avoided if the parties and their counsels are able to plan in advance. The reason why parties choose international arbitration instead of judicial proceedings is because it allows the parties a certain degree of freedom. The best idea is to incorporate a choice of law provision in the arbitration contract so that there is a certainty as to the scope of privilege. In lieu of such provision parties can set out provisions for the method the tribunal should use to apply the appropriate standard of privilege. When adding such provisions, the parties should consider the laws that apply to their counsels. They should also consider whether the matter of privilege is procedural or substantive. If there is no agreed choice of law provision, then the scope of privilege should be addressed by the tribunal at the very early stage of the proceeding. There is nothing that prevents the parties form agreeing on a proposed scope of privilege at any stage. If this is done, then this should be incorporated into the arbitration agreement.
Md. Hasibul Islam, ACIArb, LLM
Barrister
Email: accesshasibul@gmail.com
Telephone: +880 1778810205 (Bangladesh)
Inns of Court: Lincoln's Inn
Date of Call: July 2017