Webb v Lewis Silkin LLP

Arbitral confidentiality is a substantive obligation, but it is not absolute. A party may disclose confidential arbitral material where reasonably necessary to protect legitimate legal interests. A claimant does not require prior permission from the arbitrator or the court before bringing proceedings against a non-party alleging misuse of information obtained during an arbitration. The question is different where the dispute is solely between parties to the arbitration, since the arbitrator will ordinarily determine the scope of the implied confidentiality obligation while the arbitration continues. A solicitor within the confidentiality ring may take steps reasonably necessary to defend proceedings, but may seek directions from the court seized of the action where the permissible scope of its defence is uncertain.

The claimant sued her former firm’s solicitors, alleging that they had accessed and read emails in a work account and thereby misused private information and breached confidence. The defendant sought a stay under the Arbitration Act 1996, arguing that the claimant first needed a ruling from the arbitrator or the court on whether bringing and conducting the proceedings would breach arbitral confidentiality.

The claimant was a party to the underlying arbitration, but the defendant was not a party to the arbitration agreement. The issues were whether the amended particulars were capable of breaching arbitral confidentiality, whether prior authorisation was required, and whether section 44 supplied a jurisdictional basis for the defendant’s application.

1. The application for a stay was refused. The claimant did not need permission from the arbitrator or the court before commencing proceedings against the defendant.

2. Arbitration proceedings are private and confidential as a matter of substantive law. The obligation is not absolute. Disclosure is permissible where consent, an order or leave applies, or where disclosure is reasonably necessary to protect an arbitrating party’s legitimate legal interests. The boundaries of the obligation remain fact-sensitive and continue to develop.

3. The fact that correspondence was written in an arbitration did not automatically make it subject to arbitral confidentiality. The obligation applied to facts in issue in the arbitration. Nevertheless, allegations that access to emails was unnecessary or disproportionate, and that disclosed emails could have been obtained by other means, were capable of requiring inquiry into what had been disclosed and why. Those allegations could therefore breach confidentiality.

4. The distinction drawn in Emmott v Michael Wilson & Partners Ltd between disputes involving parties to the arbitration and proceedings against a stranger was material. If the claimant had sued the arbitrating party alone, the issue would ordinarily have been for the arbitrator, or the appropriate supervisory court. The defendant was not a party to the arbitration agreement, despite being within the confidentiality ring.

5. Section 44 of the Arbitration Act 1996 did not apply. The provisions concerning property and interim injunctions could not be extended to create jurisdiction over alleged misuse of confidential information.

6. The defendant was entitled to take steps reasonably necessary to protect its legitimate interests, including instructing lawyers about its defence. If uncertainty remained, the proper course was an application to the court seized of the action, joining the claimant, the defendant and, where appropriate, the arbitrating firm.