The rules of most arbitration tribunals provide for / require the disputing parties to participate in a voluntary exchange of documents (including electronically stored information) that is relevant to the dispute or claim.

See., e.g., JAMS Comprehensive Arbitration Rules, Rule 17; AAA Commercial Rules, Rule 22.

Additionally, those same tribunals generally allow traditional, court-style discovery such as depositions and formal document requests to the extent provided by the parties’ arbitration agreement or allowed by the arbitrator for good cause shown – i.e., the discovery will expedite the evidentiary hearing or is necessary so that the disputants have a fair opportunity to prove their claim or defense. While arbitrations are private matters that do not involve records or proceedings that are open to or accessible by the public, there may nevertheless be confidentiality concerns when the documents and information subject to production or exchange contain proprietary information, trade secrets and private financial information that otherwise would not be available absent the production. In commercial arbitration, these issues and concerns frequently exist on both / all sides of the dispute.

In court litigation, recent studies have shown that discovery represents more than 50% of the total amount parties each spend on the litigation effort. Where discovery is allowed in arbitration, which is more and more frequently the case due to the increased use of arbitration in various types of business-to-business disputes, a page can be borrowed from the federal courts in terms of avoiding a lot of expense on protective order motions by starting with a blanket (or standard) “confidential-discovery” protective order. Typically, a blanket protective order permits a party to designate parts of its produced discovery as “CONFIDENTIAL” or “CONFIDENTIAL-ATTORNEY EYES ONLY” based upon a good faith belief that there is good cause for the documents or information to be treated as “confidential.”

The definition of what is eligible for “confidential” designation is usually narrow, and expressly excludes

  1. information in the public domain or previously made public,
  2. documents produced in discovery that were acquired or otherwise available outside the discovery process, and
  3. matters of general scientific knowledge.

Protection via a standard “confidential-discovery” protective order is generally only provisional, meaning that it will include provisions whereby the designation may be challenged.

A suggested form of “confidential-discovery” protective order for use in arbitration is posted on the Templates page of this website, or you can CLICK HERE