Members Only Club: Confidentiality Rings In Litigation

The risk that confidential or commercially sensitive information might have to be disclosed to a competitor in litigation can be a real concern for commercial parties.

Where the disclosure of certain information might give a competitor an unfair commercial advantage, the courts may put in place what is known as a 'confidentiality ring' or 'confidentiality club'. Although not yet a common feature of Irish litigation, two recent decisions, one in a competition dispute and the other in a procurement dispute, are welcome developments in this regard.

IN THE CLUB

Where the court sets up a confidentiality ring or club, certain restrictions are placed on access to and use of the information in question. Typically the court will direct that only the parties' lawyers (and not the parties themselves) and their experts may inspect the documents. The lawyers and experts will also be required to undertake not to reveal the contents of the documents to their clients or other third parties. The protection of confidential information through the use of confidentiality rings or clubs is well established in English law. They are typically put in place in competition cases or cases involving trade secrets or intellectual property rights. However, the Irish courts have historically been reluctant to curtail discovery rights in this way. One argument against their use is that they are not necessary as parties to litigation, as part of the discovery process, impliedly undertake to only use information exchanged on discovery for the proceedings at hand. However, the reality is that a party who sees commercially sensitive information cannot "unsee" it and may therefore gain a commercial advantage.

COMPETITION DISPUTES

In a recent judgment on an application for discovery in a competition dispute, Goode Concrete v CRH plc, the Irish High Court accepted that it has an inherent power to establish a confidentiality ring where appropriate. When deciding whether to do so, the Court must balance the interests of both parties to the litigation: the plaintiff's right to have access to the information needed to progress its claim and the defendant's right to protect its business interests from possible abuse of discovered materials.

A key factor in the decision to grant a confidentiality ring in Goode Concrete was that that the dispute between the parties, competitors in the concrete sector, involved competition law. The Court noted that it is increasingly becoming standard...