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Confidentiality and the Award - What are your thoughts?

An arbitrator is encouraged (if not empaneled) to preserve the confidentiality of sensitive documents or information (e.g. as provided in most institutional rules). Where an award involves a discussion of such confidential and sensitive material (e.g. personal or medical details), should the arbitrator be guided by certain protocols or procedures? If yes, provide examples. Does the analysis change where it appears the award is more likely to be dealt with in subsequent court proceedings for vacatur, confirmation, or the like?

What are your thoughts/comments? Please provide below.

Comments (12)

I have never seen this done. Parties deal with this issue in confirmation / vacatur proceedings by asking the court for permission to file the award under seal and place redacted versions in the public record.

The US courts are reluctant to impose confidentiality agreed between the parties on third parties who may seek discovery and also tend to expose any information necessary to their decisions. For example, in Veleron Holding, BV v. Morgan Stanley, 2014 WL 1569610 at *1 (SDNY 2014), the court stated that despite the fact that the arbitration record was confidential under LCIA rules:

"Litigation in an American court is not governed by the principle that ‘what happens in Vegas stays in Vegas’ – or in this case, in London. Private agreements cannot be used to circumvent United States courts’ policy in favor of open litigation . . . . "

Therefore, if the parties are very concerned about confidentiality, they should seek a bare award. In addition, for material subject to privilege or other protections, confidentiality orders are a must and the arbitrator should not cite the confidential informatio.

Anonymous:

Awards should be confidential. If the parties choose to vary that by agreement or otherwise that is different. However the neutral should not disclose unless authorized by the parties.

Stephen A. Hochman:

Laura correctly notes that some courts are reluctant to seal the record on appeal even if all parties request the record be sealed. Thus the arbitrator should not include any confidential information in the award, but that probably could be done in an award that gives a brief explanation of the reasons for the decision and award.

Robert Bartkus:

With agreement of the parties, I have issued a nonconfidential 'summary award' that can be filed and be the basis for a confirmation motion. I believe this can be done under the AAA rules even without full consent, i.e., on the motion of a party. If a party wishes to move to vacate all or part of the award, they may take the ne essay steps to file it under seal.
Bob

Confidentiality is best protected by the parties by agreement. Complete confidentiality is likely not possible. Protective Orders are appropriate during proceedings. The Award itself cannot be completely confidential, else it could not be confirmed or vacated.

Protected Health Information/Personal Health Information should always be protected and not disclosed. PHI issues should be addressed at the initiation of the arbitration and should be subject to carefully drafted protective orders and not disclosed in awards. The Office of Civil Rights at U.S. HHS has a current initiative underway examining how healthcare providers are protecting PHI and the strength of providers' data security measures with large dollar settlements already reached with providers whose data security procedures were questioned. All healthcare arbitration parties have responsibility to protect PHI and this subject should be one of the first addressed in the arbitration process.

Edward Dreyfus:

The confidentiality order or parties' agreement could take care of this exposure by providing the award shall not be publicly released until each party has had the opportunity to redact confidential information appearing in the award. In any event, the arbitrator should not be restrained from writing his/her reasons for the Award. The arbitrator should never release publicly or use any information in the award.

Anonymous:

Unless the parties have agreed otherwise in their arbitration agreement or by later agreement, the presumption is that the existence of the arbitration, the award, and any information disclosed in the course of the arbitration are not to be identified outside of the parties and the forum by the arbitrators. It is good practice for arbitrators to establish at the initial scheduling conference whether the parties want to have a protective order in place to further limit disclosure of certain types of information except to designated party representatives. Short of court order or agreement, awards should not be disclosed by arbitrators.

Anonymous:

My rule is fairly absolute, that is, to protect confidentiality of award and opinion even if award is attacked in court or the public square or both. The parties, of course, can change this by agreement or through waiver, and courts have been responsive through sealing and the like.

Arbitrators are ethically required to keep arbitration confidential. The parties actually have no such requirement unless they enter into a confidentiality agreement regarding the arbitration and the evidence sought to be introduced. A recommended practice would be to enter into a confidentiality agreement. In the Veleron case Laura Kaster cites, arbitration was pending in London when litigation was commenced in the NY USDC on a related matter. If what parties fear is reference to the award in a vacatur hearing, then the award could be bare bones, or the parties and the arbitrator could agree on the manner in which sensitive data could be referenced in the award so that the data itself is not disclosed.

Anonymous:

Would it be helpful if after an arbitrator unintentionally includes sensitive or confidential information in an award a party could ask for the award to be modified to remove that information from the award. This might be done by amending R-48 Modification of the Award to include as a ground the redaction of information that the parties had previously agreed was confidential. The timing of Rule 48 would allow this to occur before the other party can move to confirm.

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