Litigation Translation Services for the EU Countries
As previously discussed in another legal translation company‘s blog post, when it comes to evidence gathering, the EU and US take very different approaches in the arbitration field. Put simply, the civil law jurisdictions in the EU and the US have fundamentally different methods of gathering evidence in civil litigation. In general, civil law countries within the EU tend to limit disclosure of evidence to what is proffered by each party as evidence in support of the party’s case. In contrast, pre-trial discovery obligations in the US are much broader. In international arbitration involving parties from both sides of the pond, the parties and the arbitrators should look for middle ground that balances both of these approaches, such as one that allows some circumscribed discovery but not the type of wide-ranging discovery allowed by the courts in the United States. However, without special care, even the provision of limited discovery can lead to privacy concerns and potential breaches of EU law.
Likewise, it is also important to keep in mind that European privacy laws are not just a tool used by parties unwilling to provide discovery. Rather, even if an EU business entity involved in an arbitration wants to provide the requested discovery, it must still comply with applicable privacy and data protection laws. Thus, it is essential that an arbitration tribunal carefully manage the discovery process and fully address privacy and data protection issues at the onset.
Differences in Data Protection Rules
Just as the US and EU have different rules and traditions as to discovery, so too do they diverge when it comes to data protection. Fundamentally, the two have very different notions as to what is considered ‘personal data’. To effectively manage discovery in an arbitration having participants from the US and EU, one must start by understanding these differences and, more importantly, the exceptions. It is the exceptions that we focus on now.
EU law allows for the processing of personal data for extraterritorial discovery purposes only under specific exceptions.
Consent: Although it may appear that employers may legitimize their data processing regimes by obtaining the consent of their employees who may potentially be relevant to discovery, the law says that consent alone will not be sufficient to support processing of documents for litigation. Specifically, the consent must be both specific and informed and only where there is a ‘real opportunity’ for the individual to withhold or withdraw consent without suffering any penalty.
In commercial arbitration, because the issues typically revolve around a particular contract, many of the individuals who would potentially be providing relevant documents may be in a position to give consent. However, according to EU law, even these individuals may subsequently withdraw their consent at any time – thus lowering the utility of consent as a legal basis for complying with US discovery requirements.
Legal Necessity: As an alternative to consent, one may establish the legitimacy of data processing where ‘necessary for compliance with a legal obligation’. This legal basis is interpreted very narrowly to include only those situations where there is an EU statutory requirement. This basis would not appear to apply directly to arbitration, which is a creature of contract, as opposed to being a legal obligation.
Legitimate Interest: A third exception is when the data is needed for the purposes of a legitimate interest. Arbitration discovery may fall within this area, which specifically authorizes use of information where necessary for purposes of a legitimate interest pursued by the organization or a third party to whom the data is to be disclosed to and not outweighed by the privacy rights of the individual. One example is the production of information in the context of a private, confidential arbitration under the control of an arbitration tribunal in keeping with the arbitration goal of efficiency and justice. However, the law does stress that the importance of proportionality of the data, the relevance of the data, and the possible consequences for the individuals concerned should be taken into account and adequate safeguards taken to protect the individual’s rights. Thus, the arbitration tribunal will typically actively manage the arbitration process to ensure that any discovery allowed is reasonably circumscribed.