In a move aimed at increasing transparency, the Delaware Court of Chancery has made it harder to keep information confidential by limiting the categories of information that can be kept secret and by making documents automatically available to the public when they don’t meet those requirements.

Under the new rule, any party claiming confidentiality needs to show “good cause,” which is defined as existing “if the public interest in access to court proceedings is outweighed by the harm that public disclosure of sensitive nonpublic information would cause.” Examples of information that can remain confidential include trade secrets; sensitive financial, business, or personnel information; medical records; Social Security numbers; and the names of minor children.

Sean J. Bellew, a Wilmington-based Ballard Spahr litigation partner, said the new rules place a stronger burden on attorneys to accurately assess information’s value as confidential before seeking a designation from the court.

“I think this puts the onus on the filing party to really do their homework before they file a document as confidential,” said Mr. Bellew. “They now can’t just draft up something and decide to mark it as confidential and save it for later…The rule will make attorneys examine the nature of what they believe should remain confidential before they seek to have it under seal. It will require the lawyers to work as gatekeepers to ensure that their claims of confidentiality will pass muster.”

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