Disclosure and Privileged Information
Under the rules for standard disclosure each party in a claim has to disclose (identify and list) to the other parties all documents in its control that assist or harm its own case or the case of any other party to the dispute. There is an implied undertaking that documents that have been disclosed will not be used other than for the purposes of the litigation.
Where documents are privileged a party is not required to provide copies or allow inspection by other parties of those documents. The main categories of privileged information are:
Legal Advice Privilege - Communications passing between a party and its legal advisors in which that party is seeking or obtaining legal advice. This applies to transactional advice as well as advice relating to contentious matters;
Litigation Privilege - Communications made when litigation is likely or has begun, passing between a party and its legal advisors, a party and third parties (potential witnesses, for example) where the main purpose of the communication is to seek or obtain evidence for use in the litigation, or to provide advice on the litigation; and
Without Prejudice Privilege - Correspondence and other communications generated as part of a genuine attempt to settle an existing dispute.
Where documents are privileged a party has to be careful not to do anything that would cause the privilege to be lost or "waived" by releasing it to a third party.
Orders to Protect Confidential Information
The fact that a document contains confidential information does not give a party any automatic right to prevent another party from seeing it. Generally, the courts give great weight to the principle of open justice and are reluctant to grant orders that would interfere with that principle and prevent a party from having access to all relevant information. Any applications to protect confidential information must be very targeted and supported by full evidence explaining why the order is required.
Documents on the Court File
One concern of parties to litigation is often whether third parties, and particularly the press, can obtain documents from the court file.
The general rule is that a person who is not a party to proceedings may obtain from the court records a copy of a statement of case, but not any documents filed with or attached to it (CPR 5.4C(1)). Under this statements of case are public documents once the defendant has filed its acknowledgment of service or defence, or once the claim has been listed for a hearing or if judgment has been entered.
A party wishing to keep the contents of a statement of case out of the public domain must make an application. The expression "sealing the court file" is often used where the order made by the court that completely prevents non-parties from accessing the court file, but under the Civil Procedure Rules the court can restrict the type of person who can have access or order that parts of the statement of case are edited out or “redacted” so that they cannot be read.
Instead of seeking an order, litigants often attach a "confidential schedule" to a statement of case, but it is unclear whether that approach would always be upheld by a court if it was challenged and the safer option is to obtain an order sealing the confidential schedule.
Under the court rules a third party can apply to the court for permission to see a copy of any other document filed by a party, or a communication between the court and a party or another person. If the documents were referred to in open court and form part of the judge's decision making process, the principle of open justice means that the court will generally be willing to grant access to such documents.
The other party in litigation is entitled to a copy of any document referred to in a statement of case, witness statement, witness summary or affidavit unless it can be shown that the disclosure is not required for the fair disposal of the action.
Restrictions use of disclosed documents
Disclosed documents are subject to an implied undertaking that they will be used only for the purpose of the proceedings in which they are disclosed unless the court grants permission or until a document has been read to or by the court, or referred to, at a hearing that has been held in public. Recent decisions have shown that generally the court will grant permission if the use to be made of the documents is to bring other proceedings.
For a party wishing to protect confidential documents from public disclosure once they are read by the court or referred to at a hearing that is held in public, an application can be made for an order restricting or prohibiting the use of a document that has been disclosed.
Restricting who can review disclosed documents
Even with the implied undertaking that documents will not be used other than for the purposes of the litigation, there is a risk with sensitive commercial information that disclosure of that information to the other parties could result in other use being made of that information. For example, in a case where a party is required to disclose the terms of its patent licences to a competitor that competitor will know that information when it comes to grant its own licences and there is an obvious risk of inadvertent use.
Confidentiality clubs can be agreed or ordered restricting access to confidential information by placing restrictions on who can review the information and where it can be viewed. Often disclosure is limited to solicitors and barristers in such circumstances and may also include experts or foreign lawyers. Parties to a confidentiality club are usually required to provide undertakings regarding their compliance with the restrictions ordered or agreed.
In some circumstances, the party itself may be excluded from the confidentiality club. This occurred in the recent case IPCom GmbH & Co KG v HTC Europe Co Ltd  EWHC 52 (Pat) where the proceedings were to determine the terms on which Nokia should be licensed under IPCom's patent. As part of its case, Nokia relied on the terms of the licences of its own technology and the court held that those licences should not be made available to a member of IPCom's internal management team.
Hearings in private
Trials are held in public and it is very difficult to obtain an order that would keep a trial confidential. If you are concerned to protect confidential information in proceedings then having a hearing held in private will mean that the public and press cannot attend and documents referred to in the course of the hearing will remain subject to the implied undertaking. If an order for a private hearing is obtained it is also unlikely that a third party could make a successful application for copies of documents on the court file referred to at the hearing.
Recent court decisions have suggested that it will be very difficult to convince the court that holding the hearing in private is necessary or in the interests of justice in most commercial cases. An application for a hearing in private was rejected in Global Torch Ltd v Apex Global Management Ltd  EWCA Civ 819 where serious allegations had been made about the conduct of two Saudi princes. The Court of Appeal considered the relevant legal principles of weighing the importance of open justice against rights to a fair trial, to respect for private and family life and freedom of expression under the European Convention on Human Rights and concluded that there was no justification in that case for departing from the principle of open justice.
It is possible to identify parts of a draft judgment as being confidential and have those parts redacted However, the content of the judgment is ultimately a matter for the judge and it is difficult to overcome the presumption that a judgment containing the judge's reasons for his decision should be available to the public.