Many organisations rely on trade secrets and confidential processes to attain a commercial edge over their competitors. However, a risk of litigation is that your confidential information can be exposed to your competitors or the public. The exposure of your organisation’s confidential information when bringing or defending a legal claim can be detrimental to your business.
Documents discovered in proceedings
It is a requirement in legal proceedings that each party disclose and produce any documents, or information, relevant to the dispute for inspection by way of discovery. However, this can be a problem for a party when, for example, the documents to be produced for inspection contain commercially sensitive and confidential information, especially when the other party to the dispute is a trade competitor.
There are some restrictions placed on parties about how they can use documents discovered in litigation. For example, it is an established principle that parties to a litigation are subject to an implied undertaking only to use documents and information obtained in discovery for the purpose of the proceedings, unless the Court grants leave, or the material has been received in evidence in the proceedings. This implied undertaking is recognised as a substantive legal requirement. A breach of this substantive obligation amounts to contempt of court.
However, where the other party to the dispute is a trade competitor, this implied undertaking is not sufficient to protect the commercially sensitive and confidential information from their prying eyes. It is the disclosure itself that could compromise any commercial edge a party may have against their trade competitor.
Documents held by the Court
In addition to being required to disclose documents as part of the discovery process, to advance a claim or mount a defence in legal proceedings, parties will often need to rely on documents containing their commercially sensitive and confidential information. However, once this material is filed with the Court, it is at risk of being viewed by the other party, or in some cases, members of the public.
When faced with the risk of their commercially sensitive and confidential information being seen by the other party to the proceedings or other members of the public, a party needs to take steps to protect this confidential information. In these cases, steps can be taken to restrict access to this information by the opposing party and the public.
Restricting access to confidential information
Orders restricting access to documents on court record
In general terms, a party to a proceeding has a right to access any filed document held by the Court relating to the proceeding in which it is a party, save for a document where the Court has made an order restricting access.
Not all documents, information, or records held by the Court are publicly available or accessible. Orders of the Court create different rights of access for parties to a proceeding and members of the public.
A member of the public or a media representative may obtain limited information or documents filed in a proceeding as of right. If a member of the public or media representative seeks more detailed information or documents, that person must apply to the Court.
The Court retains an overriding discretion to allow access to documents or records it holds. It has the power to restrict access to such information and records, if it considers that it is confidential and appropriate in the circumstances.
Further, a party can make an application to the court pursuant to Order 67B Rules of the Supreme Court 1971 (WA) (RSC) for orders restricting access to its confidential documents. It can seek orders limiting the person or class of person from accessing the documents.
For example, pursuant to Order 67B of the RSC, the Court can make orders restricting access to documents on the Court record by persons who were not parties to the proceedings. The Court can make an order that restricts access to information, or a record, or other thing if it considers:
In the case of Cockburn Cement Ltd v Minister for Environment [2019] WASC 9 (Cockburn Cement), Cockburn Cement Ltd made an application to the Court pursuant to Order 67B of the RSC. They sought to restrict access to documents on the Court record so that only the Court, and the other party, may have access to the documents. The commercial reason to restrict the documents was that they contained confidential information about Cockburn Cement’s business, including:
In Cockburn Cement, the Court stated that it was not necessary that the confidential information had a particular commercial character or a particular commercial value. In that case, the Court considered that the information was confidential because it was not otherwise publicly accessible, it was treated by Cockburn Cement Ltd as confidential, it was not voluntarily disclosed, and it related to Cockburn Cement’s business, commercial, or financial affairs. In Cockburn Cement the Court was satisfied that the information that was the subject of the application was confidential and that access should be restricted for all persons other than the Court and the parties to the action.
Confidentiality regimes
The Court also has the jurisdiction, power, and discretion to tailor make orders for inspection, including orders imposing a confidentiality regime to be complied with by the parties.
By way example, in Alcoa of Australia v Apache Energy Ltd [No 4] [1] the primary judge held that a confidentiality regime was justified as it was substantial litigation, there were a large number of documents involved, a substantial number of documents contained confidential or commercially sensitive information, and discovery was to be in stages. The primary judge left the scope and terms of the confidentiality regime to be determined by the parties.
Whenever one enters litigation, they should consider the resulting indirect business consequences that can arise. One such business consequence is the disclosure of commercially sensitive and confidential information to the detriment of its commercial interests. At Lavan, we understand the commercial imperative of protecting confidential information and preventing it from being accessed by and / or disclosed to others. We also have experience in obtaining orders and negotiating regimes to ensure this information is protected.
If you have any questions as to how to protect your confidential information, please contact Cinzia Donald.
[1] Alcoa of Australia v Apache Energy Ltd [No 4] [2013] WASC 377.
