Confidential Pharmaceutical Data: Restricting Disclosure in Court Proceedings

Article by Richard Best, Ashurst*

Pharmaceutical companies produce a wealth of valuable and commercially sensitive information, much of which needs to be kept beyond competitors' reach. Nevertheless, a measure of disclosure is commonplace given the data and fairness requirements of regulators, codes on access to government information or freedom of information legislation, and the disclosure process in civil proceedings if a company finds itself in court. The author has addressed all but the last of these elsewhere.(1) The purpose of this article is to provide an overview of the circumstances in which the disclosure in court proceedings of commercially sensitive data can be restricted, primarily from an English perspective but also by reference to Commonwealth authorities.(2) In particular, it addresses:

the relevance of confidentiality to disclosure obligations;

pre-action disclosure and confidentiality orders;

circumscribed disclosure of confidential documents and trade secrets in civil proceedings;

the circumstances in which a proceeding or part of it may be heard in private; and

post-trial confidentiality orders over documents disclosed during civil proceedings.

Confidentiality alone no protection against disclosure

In England, as in other common law jurisdictions, parties to proceedings are obliged to disclose certain documents in their control. Can confidentiality be raised as a bar to disclosure? The short answer is no. As Lord Wilberforce once put it, "there is no principle in English law by which documents are protected from discovery by reason of confidentiality alone".(3) However, that is not to say that confidentiality is irrelevant. It may "properly play a potent part in the way in which a tribunal or court exercises its discretion in the matter of discovery".(4) Bare assertions from one's opponent that confidentiality is irrelevant to disclosure may, therefore, need to be resisted.

Pre-action disclosure and confidentiality orders

Whilst disclosure is normally made after the commencement of proceedings, under section 33 of England's Supreme Court Act 1981 and rule 31.16 of the Civil Procedure Rules ("CPR"), pre-action disclosure may be ordered, upon application, where (a) the applicant and respondent are likely to be parties to proceedings, (b) the documents sought would have to be disclosed had proceedings been commenced, and (c) pre-action disclosure is desirable to dispose of the anticipated proceedings fairly or without proceedings or to save costs. Even if one of the prerequisites in (c) is satisfied, the Court retains a discretion as to whether to make an order.(5) An application for pre-action disclosure must be supported by evidence, i.e., a witness statement explaining why the documents are required, how it is that they fall within rule 31.16, that there are no other means of obtaining the information, and the like. This is an important exercise because the courts are wary not to allow fishing expeditions.

Unlike the position that prevailed before the CPR came into force in 1999, pre-action disclosure is not limited to personal injury cases, although the courts have stated that "pre-action disclosure should not be ordered as a matter of course, at any rate where the parties at the pre-action stage have been acting reasonably".(6)

Voluntary pre-action disclosure

A party wishing to obtain pre-action disclosure is expected to notify the other party of its desire for documents before making an application to the courts. Where appropriate, a reasonable response to such a request through the provision of documents (even if not acceding to it entirely) can avoid an application (or at least reduce the likelihood of one succeeding) and provide an opportunity for negotiating confidentiality agreements under which the range of persons within and advising the opposing party entitled to inspect commercially sensitive documents is to be restricted. (One may also note that an unreasonable refusal to comply with a request might be considered contrary to the general terms of the Protocols Practice Direction and any specific pre-action protocols which apply to the dispute, which in turn could lead to adverse costs consequences in court.) Although much will depend on the type of proceedings and parties involved, it may be possible to obtain confidentiality undertakings from all solicitors, counsel, experts and claimants (assuming the request came from claimant(s)) before their receipt of documents.

Confidentiality in the wake of court-ordered pre-action disclosure

Similarly, if the parties cannot agree on voluntary pre-action disclosure and if the court makes an order for pre-action disclosure, the party from whom disclosure is sought may wish to seek corollary orders from the court that disclosure and inspection of commercially sensitive documents are subject to redaction (blanking out) and/or limited to specified individuals within the organisation or limited to legal advisors only, coupled with confidentiality undertakings. (To decide such issues the court may have to read the documents in question.(7))

The Australian case of SmithKline Beecham Plc and others v Alphapharm Pty Ltd (8) illustrates how this can work in...