INSTITUTIONALISING PRIVILEGE REFEREES IN INDIA: BRIDGING PROCEDURAL GAPS IN PRIVILEGE ASSESSMENT

  I.               Introduction

Indian courts are grappling with over 5 crore pending cases and a poor judge-to-population ratio of 21 judges per million. This is far below the ratio of 50 per million as recommended by the Law Commission of India. This constant pressure has left the judiciary not just overburdened but visibly strained in its functioning. The lack of consistent procedures for privilege adjudication exacerbates such a situation.

With the advancement of technology, the evidentiary landscape has undergone significant changes. Disputes now involve heaps of confidential information, be it physical or digital. As the complexity of data increases, so does the risk of infringing upon legal privileges or constitutional safeguards, such as the fundamental right against self-incrimination under Article 20(3) when handling them. With no clear standards on how to deal with privilege issues that come with such information, there is a grave likelihood of bias and inadvertent breaches.

Against this backdrop, the authors propose the incorporation of the concept of ‘privilege referees’ or ‘masters’, independent third-party experts to assist the court, in line with global best practices. Given India’s efforts to strengthen its standing as a hub for international arbitration, and in light of Supreme Court’s pro-arbitration spirit as seen in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., this topic remains relevant.

  II.                 Privilege Issues in Contemporary Times

While the principle of legal privilege is a cornerstone of procedural justice and widely recognised across common law and civil law jurisdictions, disputes frequently arise over the classification of specific materials as privileged. These issues have significant impact on cases involving volumes of sensitive data, some of which might be prejudicial to the parties and could drastically affect the outcome of the dispute.

Because these disputes can deeply impact outcomes, United States courts have introduced neutral experts known as privilege referees or masters, a neutral third party appointed to undertake an independent assessment of the disputed documents. Such referees are faced with scenarios such as (i) evaluating whether seized documents in a criminal investigation are protected by attorney-client privilege, (ii) determining the scope of privilege in cross-border proceedings, and (iii) assessing whether the contested documents are protected by executive privilege or public interest immunity. Thus, their role becomes particularly important in cases where judicial time is constrained or an objective lens is required owing to the volume, sensitivity, or complexity of the material in question.

Recently, President Donald Trump, sought the appointment of a special master to review sensitive documents, seized from his Mar-a-Lago property in a 2022 investigation. The special master was tasked with reviewing all documents covered by attorney-client privilege, as well as any records possibly covered by executive privilege. While the appointment of the special-master was eventually struck down by the US Court of Appeals, this case brought the issue of legal privilege and the importance of special masters or privilege referees back into the limelight. 

Similarly, the importance of such masters has also been recognised in cases such as Waymo v. Uber, where a special master was appointed to grapple the extent of trade secret misappropriation by Uber. The special master, John Cooper, came to the conclusion that Uber withheld a crucial letter from the Court. 

Drawing a parallel to the Indian context, investigative agencies like the Enforcement Directorate and the Serious Fraud Investigation Office exercise broad coercive search powers often resulting in the indiscriminate seizure of materials, some of which may be protected by legal privilege. In the absence of an independent privilege adjudicator, these investigative agencies become the sole arbiters of deciding the limits of legal privilege creating potential for abuse of due process and breaches of confidentiality. Despite such pressing concerns, India is yet to evolve and institutionalise privilege referees in its procedural framework, highlighting a missed opportunity to align with evolving global practices.

  III.                 Comparative Jurisprudence on Privilege Referees and Special Masters

In the United States, Rule 53 of the Federal Rules of Civil Procedure, allows independent Masters to be appointed, with a view to ensuring fairness. However, due regard is also placed on the efficiency concerned with such appointment, with Rule 53(a)(3) placing a positive obligation on the court to “consider the fairness of imposing the likely expenses on the parties and must protect against unreasonable expense or delay.” They are granted the power to compel, take, and record evidence, when conducting an evidentiary hearing. Further, a sufficient opportunity to be heard must be given to parties before such Master is appointed. The court is also vested with the power to “adopt or affirm, modify, wholly or partly reject or reverse, or resubmit” the Master’s report or findings, ensuring final decision-making authorities lies with the court.

Similar laws also exist for state courts, such as Section 638 of the California Code of Civil Procedure, and Section 3104(b) of the New York Civil Practice Law and Rules. The American Bar Association while assessing the effectiveness of this model has observed that it drastically enhances efficiency and reduces litigation costs.

In Heraeus Kulzer, GmbH v. Biomet Inc., the Magistrate urged the parties to consider the appointment of a Special Master due to the large number of sensitive documents, citing the fact that it would not be possible for courts to “undertake some sort of meaningful in camera review of documents each time there is a dispute”, highlighting the need for such Masters. Special Masters have regularly been stepping in to help with matters that would overburden judges, for instance, in 1999, they were appointed by the court in Blackman v. District of Columbia to ensure disabled children received adequate due process in hearings for complaints in relation to the city’s failure to adhere to Diversity, Equity and Inclusion (DEI) requirements.

Beyond the United States, the Australian Law Commission has also debated the advantages and disadvantages of the appointment of such Special Masters, drawing from the experiences of the United States and noting that they bring significant experience, expertise, and help judges offload the duty of reviewing extensive documents in camera. The Commission observed that in the United States, judges increasingly appoint Special Masters to handle discovery issues, especially related to electronically stored information (ESI). It vouched for the inclusion of such a system in its report, ALRC Report 115.

        IV.                  The Need for Privilege Referees in the Indian Legal System

Sections 132-134 of the Bhartiya Sakshya Adhiniyam, 2023 (erstwhile Sections 126-129 of the Indian Evidence Act, 1872) provide protection to privileged documents. However, they fail to lay down a comprehensive impartial mechanism through which such protection must be granted. In practice, judges often review such documents in camera without any neutral third-party, such as in the United States, risking inadvertent judicial bias. Although Section 19 of the Arbitration and Conciliation Act, 1996, permits flexibility in procedure by allowing tribunals to appoint neutral experts under Section 26, these provisions are generally not invoked for privilege assessment.

The review by courts in India remains largely unstructured with no specified timelines or subject-matter requirements. Comparatively, privilege referees in some jurisdictions are bound by defined timelines and appointed for their expertise in the subject matter. In privilege processes in other jurisdictions like the United States, judges are not put at risk of exposure to prejudicial content that they are trying to limit their cognitive consideration of, even if the document ends up inadmissible. It can be problematic when judges look at documentation that discloses sensitive legal strategies, internal corporate communication, and communications governed by attorney client privilege in these processes. While judges may feel indifferent to that content in terms of their decision-making process to follow, but being exposed to such sensitive information can unconsciously trigger cognitive phenomena for judges, such as confirmation bias or anchoring.

The appointment of an independent privilege referee who plays no role in the ultimate decision-making ensures that the merits judge’s reasoning is not affected by potentially prejudicial material. The privilege referee essentially creates a type of a ‘taint team’ within the court where he examines, categorises and, if appropriate, redacts documents and provides the judge with only non-privileged material.

The privilege referee model can be incorporated in Indian law, either through formal amendments, or in the form of soft-law extensions, such as rules of procedure or judicial guidelines. Although absent from Indian law, the institution of privilege referees can be analogised to that of an amicus curiae, who are often appointed by Indian courts to assist in cases involving complex or technical questions.

        V.           Institutionalising Privilege Referees

Due to the growing number and complexity of commercial litigation and international arbitration in India, an institutional mechanism that can enable the independent adjudication of privilege claims and is empowered to make binding decisions, without infringing the principles of judicial discretion or independence, is required urgently. This kind of mechanism has to be designed in a way that it follows the procedural law of the Indian legal system while also being able to incorporate other jurisdictions' best practices for comparison in order to be efficiently executed in the Indian legal system.

Rule 53(a) of the U.S. Federal Rules of Civil Procedure allows for the appointment of masters either with the consent of the parties or in exceptional cases where matters are complex, involve voluminous evidence, or require specialised oversight such as pre-trial management or technical determinations.

In India, Order XXVI of the Code of Civil Procedure, 1908 provides for the appointment of commissioners for limited procedural functions like local investigations or the recording of evidence. This can be amended to empower courts to appoint ‘privilege referees’ or ‘masters’ in complex disputes by including threshold triggers for appointment, such as cases involving voluminous documentation, large-scale electronically stored information (ESI), or highly technical issues, subject to judicial discretion.

Additionally, a robust neutrality framework must also be incorporated by mandating conflict of interest disclosures by court-appointed masters, akin to the requirement under Rule 53 of the US Federal Rules of Civil Procedure. Parties must be allowed to raise objections to such appointment in a time-bound manner.

Rule 53(b) lays down a detailed appointment order that delineates the master’s duties, procedural limitations, communication protocols, and the mechanisms for judicial review. This is an area where the Indian system could benefit substantially by mandating the courts to issue standardized appointment orders that clearly provide for the authority of the master, specify the nature of the tasks delegated, and outline whether the court will review the master’s report de novo or under a deferential standard. Such a measure would introduce consistency and legal certainty in the functioning of court-appointed masters.

Similar to Rule 53(c)(2), Indian law could also empower masters to impose non-contempt sanctions and recommend contempt sanctions for party misconduct and non-cooperation to increase compliance comparable to the cost orders under Section 35B of the Code of Civil Procedure. Privilege referees should be empowered to review the documents in camera, assess the applicability of Sections 132-134 of the Bhartiya Sakshya Adhiniyam, 2023 and provide a neutral non-binding, reasoned report to the court or tribunal within a recommended period of 15 to 30 days along with providing a 7-day window for objections by any of the parties. This process would reduce delays and help maintain both efficiency and fairness in hearings.

The final decision must remain with the adjudicating body, ensuring that core judicial function is not delegated. Courts may maintain panels of qualified individuals, such as retired judges, senior advocates, or professionals with expertise in commercial litigation, to act as privilege referees. Selection criteria must take into account neutrality, experience, and compliance with ethical obligations under the Bar Council of India Rules (Part VI). To ensure neutrality, guidance can be taken from the Red, Orange, and Green List by the IBA Guidelines on Conflicts of Interest in International Arbitration (2014).

Drawing from Rule 53(g), the law must also lay down a structured compensation mechanism ensuring that the court fixes reasonable fees and allocates them fairly between the parties based on the complexity of the case. A master fund could be created to compensate offers involved in Public Interest Litigations or indigent matters.

Lastly,  a similar amendment could be introduced to the Arbitration and Conciliation Act, 1996 under Chapter V (Conduct of Arbitral Proceedings) empowering arbitral tribunals to appoint referees for privilege review either through the mutual consent of the parties or as per the tribunal’s discretion.

        VI.           Obstacles and the Way Forward

While the adoption of such a system grants many benefits, it does not come without its challenges.

Allowing privilege referees to adjudicate on privilege matters which is a core judicial function might be considered non-delegable under constitutional principles. However, Indian jurisprudence does recognise limited and procedural delegation to neutral officers, provided final adjudication authority remains with the court. Indian courts have historically permitted the appointment of court commissioners under Order XXVI CPC and amicus curiae in constitutional and public interest litigation. Additionally, under Section 45 of the Indian Evidence Act, 1872, courts have often appointed technical experts. Similarly, the appointment of privilege referees can be justified.

To ensure that such appointment does not unreasonably cause a financial burden on the litigants, the court must apportion costs through tiered fee bands based on document volume and complexity.

A phased rollout in key High Courts and commercial benches, such as those in Delhi and Bombay can help assess the model’s utility in India. The success of the model could serve as a prototype for similar rollouts in other jurisdictions.

The Law commission of India would be best-suited to develop a codified framework for implementation. It can be tasked with preparing a Model Framework for Privilege Referees, by  recommending amendments to the CPC and the Arbitration Act.

In the meanwhile, in the absence of legislative amendments, High Courts can take charge, and issue directions that guide the appointment of referees, their qualifications, and cost structures.

Bodies such as the National Judicial Academy and State Judicial Academies can help create a qualified and specialised class of professionals who can act as privilege referees. Institutional arbitration centres like Mumbai Centre for International Arbitration, Delhi International Arbitration Centre, and ICC India Arbitration Group should also be encouraged to formally adopt privilege referee provisions within their procedural frameworks as well as suggest model clauses facilitating the involvement of privilege referees. Inspiration in this regard can be drawn Rule 17(d) of the JAMS Comprehensive Arbitration Rules & Procedure, which empowers parties to appoint Special Masters with mutual consent.