Check your privilege – Exploring the different approaches to legal privilege in arbitration   

Legal privilege is an important, but often-overlooked, aspect of many arbitrations. Despite issues of legal privilege arising in nearly every arbitration (especially where document production is involved), parties rarely specify expressly the applicable privilege rules at the outset of the arbitration. Even when the parties and Tribunal have agreed to apply the IBA Rules on the Taking of Evidence in International Arbitration (the IBA Rules), they are of little substantive assistance. The IBA Rules only provide that the Tribunal shall exclude any document from evidence or production due to "privilege under the legal or ethical rules determined by the Arbitral Tribunal to be applicable",¹ without specifying which privilege rules apply. 

This article explores the challenges of determining the applicable privilege rules in arbitration and the importance of understanding the general approach to legal privilege under the major legal systems. We then explore the key principles on issues of privilege under English law and the common law, US law and civil law legal systems. Finally, we consider the possibility of a set of uniform guidance on privilege in future and suggest best practices for in-house counsel to maximise privilege despite the present lack of uniformity in rules. 

Which rules of privilege apply? 

When disputed, the Tribunal decides which privilege rules apply. This is not a straightforward task. For a start, there is no consensus as to whether issues of privilege are substantive (such that the governing law of the parties' contract would apply) or procedural (to which the law of the seat of the arbitration may apply).  

Tribunals often use a multi-factorial approach to determine the applicable law for privilege issues, considering factors like contract formation place, document creation place, and lawyers' location or qualification.² This can be a complicated analysis. Moreover, the inherently cross-border nature of international arbitration means that a variety of different jurisdictions and (potentially conflicting) rules could apply. 

It is therefore important to understand the privilege rules of the different jurisdictions that may have a connecting factor to the arbitration. While it would not be feasible for this article to cover all jurisdictions, we have summarised the general approach under the major legal systems, namely: English/common law, US law and civil law. 

Legal privilege under English/common law 

Under this system, privilege is considered as a fundamental principle arising out of the unique lawyer-client relationship. This legal system recognises three main types of legal privilege.  

Legal privilege under US law 

The rules of legal privilege in the United States can vary between states due to the dualistic nature of the legal system. Generally, legal privilege is divided into two broad categories: attorney-client privilege and work product protection.  

Attorney-client privilege is the foundational form of legal privilege. It protects confidential communications between attorneys and their clients that are made for the purpose of seeking or obtaining legal advice. While comparable to the concept of legal advice privilege under English / common law, attorney-client privilege is broader in scope because in some states, attorney-client privilege attaches if legal advice is one of the purposes for the communication (even if not the dominant purpose).  

Similar to English/common law, attorney-client privilege in the US extends to in-house counsel but many US states require in-house counsel to be a member of the bar. 

The work product protection in US law is similar to litigation privilege under English/ common law. It shields materials prepared by, or for, an attorney in anticipation of litigation from being discovered by opposing parties. However, unlike English/ common law, US law distinguishes between tangible work product (ie, documents organised for the litigation) and 'impression' work-product (ie, materials that reflect an attorney's opinions, conclusions and impressions). The latter is granted greater protection. Under the Federal Rules of Civil Procedure, a party can overcome tangible work product privilege by demonstrating a substantial need for the work-product material and hardship in obtaining the material through other means. This exception does not apply to impression work product.  

Unlike English / common law, there is no standalone doctrine of 'without prejudice' privilege in US law. Rule 408 of the Federal Rules of Evidence, however, provides that settlement offers and statements made during settlement negotiations are inadmissible to "prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement." The applicability of this rule is narrower than the 'without prejudice' privilege in English law which renders settlement communications generally inadmissible.  

Confidentiality under civil law systems 

In civil law systems, disclosure or discovery is more limited. Typically, a party only needs to disclose documents on which it relies to establish its case. 

Since most civil law systems do not require a litigant to disclose documents to the opposing party like in the common law or US legal system, civil law systems did not evolve specific rules of privilege to protect documents from disclosure.  

Instead, most civil law systems have a doctrine of professional secrecy. As part of their ethical and professional duties, lawyers are obliged to keep secret all confidential information obtained as a result of their professional relationship with the client.  

For example, under French law, professional secrecy is a fundamental duty imposed on lawyers both through the French Penal Code and applicable professional regulations. Professional secrecy covers all information exchanged between lawyers and their client, regardless of the nature of the information or the context in which it was communicated. This includes written and oral communications, as well as any documents or evidence related to the client’s case. This duty of secrecy continues even after the lawyer-client relationship ceases. However, this protection primarily applies to documents in the possession of the lawyer. If the documents are in the client’s possession, they may not be automatically protected under professional secrecy. 

Another difference is that settlement privilege is absent from most civil law systems. Under the French Civil Code, for example, a party incurs liability under "the ordinary rules of law" if it discloses confidential information obtained in the course of negotiations.³ However, this rule is not tailored to legal proceedings and does not specifically shield confidential information from disclosure.  

In most civil law systems, communications with in-house counsel are not privileged and not covered by the rules of professional secrecy. That being said, a small number of civil law jurisdictions (such as Korea, Mexico, Spain, Turkey) do extend the protection of professional secrecy to in-house counsel. 

Harmonisation of approaches? 

As issues of privilege feature more frequently in arbitration, there is growing recognition of the desirability of uniform guidelines. In September 2021, the IBA Arbitration Committee launched a task force to explore the creation of a uniform set of rules on privilege for international arbitration (the Task Force).⁴  

In its report published in February 2024, the Task Force supported the call for a set of uniform guidelines to increase certainty and consistency, and consequently, make arbitrations fairer and more efficient. Furthermore, it concluded that it is feasible to create uniform guidelines in respect of legal [advice] privilege and litigation privilege but not for without prejudice/ settlement privilege, given the latter's absence in most civil law jurisdictions.  

As part of the next stage of the project, the Task Force recommended creating an expanded working group to prepare draft guidelines. 

If you would like to find out more, we also have an existing HSF Privilege Web App for handy and practical advice on issues of privilege under English law. 

1. IBA Rules, Article 9(2)(b). 

2. IBA Arbitration Committee Task Force on Privilege in International Arbitration, Report on Uniform Guidelines on Privilege in International Arbitration, February 2024, page 5.  

3. Article 1112-2, French Civil Code 2016.

4. IBA Arbitration Committee Task Force on Privilege in International Arbitration, Report on Uniform Guidelines on Privilege in International Arbitration, February 2024, page 1.