As discussed in the previous blog, an expectation of privacy is one of the key advantages of arbitration over traditional litigation. The Ontario Arbitration Act, 1991, however, does not address the issue of confidentiality.
Whereas several jurisdictions around the world impose an express or implied duty of confidentiality, no Canadian court has ruled in favour of an implied obligation of confidentiality in arbitration.
Confidentiality of arbitration in subsequent litigation:
The courts are clear that any obligation of confidentiality regarding arbitration does not rise to the level of a privilege if arbitration documents are required in subsequent litigation.
In 2002, the Supreme Court of Canada established the test for determining whether confidentiality and sealing orders should be granted for documents produced in litigation, noting the inherent conflict between confidentiality and the open court principle.
In 2004, the Ontario Superior Court of Justice admitted arbitration transcripts into evidence despite the parties’ expectations of confidentiality because the plaintiffs, who were parties to the arbitration, “placed the confidentiality at risk” by commencing an action against the defendants.
In 2009, the Ontario Superior Court of Justice balanced “the important public interest in publicly released court decisions as against the privacy interests of the parties to the arbitration” and held that the obligation of confidentiality in arbitration did not carry over to the court proceeding.
The inclusion of specific confidentiality provisions in arbitration agreements remains the best way to protect confidentiality. Lawyers should ensure that all witnesses sign a confidentiality undertaking; that confidentiality clauses provide for the confidentiality of all documents exchanged, statements, tribunal deliberations and the final award; and that specific steps to avoid disclosure are clearly outlined.
The next blog in this series will look at the first decision of Justice Brett Kavanaugh at the Supreme Court of the United States.