On January 1, Court of Chancery Rule 5.1 became effective, replacing the now-deleted Rule 5(g). The adoption of Rule 5.1 represents a fundamental change to most aspects of the handling of confidential filings in the Court of Chancery. As with any rule, the drafters attempted to craft the rule to account for almost all situations, cognizant of the fact that application of the rule likely would reveal unintended consequences that would need to be addressed in the future. Until the court has sufficient information to determine whether any amendments are necessary, an understanding of the purpose behind certain of the changes in the handling of confidential filings may help bridge any unintended gaps. While the factors listed below are by no means exhaustive, the key tenets behind Rule 5.1 should provide some guidance in uncertain situations.
The first major change is in the definition of when "good cause" exists to show that information is subject to protection from public disclosure. Like Rule 5(g), Rule 5.1 starts with the premise that everything filed with or provided to the court will be part of the public record. Unlike Rule 5(g), however, Rule 5.1(b)(2) contains a definition of when "good cause" exists to exempt information from public disclosure. While Rule 5.1(b)(2) speaks for itself, the key to understanding its purpose is the inclusion of the modifier "sensitive" before each of the defined categories. Thus, financial or business information will not satisfy the definition merely because it has not been disclosed publicly before – it must also be sensitive in that the public disclosure of the information will cause a significant personal or competitive harm. The court intends that this more strict definition will require more information to be made publicly available than under current practice.
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