Ser Cauthrien is a knight and Teyrn Loghain's most trusted lieutenant.
Background
As a youth she helped Loghain in a fight against bandits, not realising who he was. Loghain was so impressed with her actions, he took her into his service.
Involvement
Towards the end of the game in Denerim, after The Warden rescues Anora, she confronts the party. The player character can either surrender or attack. If you are successful in fighting her, The Summer Sword is gained. If you surrender or simply lose the fight, you will be taken to Fort Drakon as a prisoner. If this happens, she is met again at the Landsmeet. It appears she wishes to fight you to stop you from interfering with Loghain. However, it is possible to persuade her to let you by without a fight. It seems even she has seen the corruption of Loghain.
Strategy
Cauthrien is one of the toughest adversaries in the game. To prepare for the optional battle following Anora's rescue, a large number of health poultices are crucial, and it is strongly recommended that The Warden's party has a mage with healing skills and plenty of lyrium potions. It would be helpful to have the others act as close-range fighters. Ser Cauthrien will have several guards and a mage backing her up. Ser Cauthrien is a heavy hitter so dispatch her as soon as possible. Keep the party's healer out of the range of the archers to avoid them being injured.
The Warden's party is heavily outnumbered, so do whatever possible to even the odds. An example strategy is to use one mage to cast sleep/mass paralize on archers, kill Cauthrien's mage as soon as possible and use another mage to focus on Cauthrien: if hex spells are available, debuff her and allow warriors to finish off her and her sidekicks quickly; Death Hex and Misdirection result in a significantly quicker demise. After tackling the key opponents, the enemy archers should pose few problems.
An alternative strategy is to use a combination of sleep and taunt abilities to separate Cauthrien from her troops. As well as characters with the relevant abilities, The Warden's party should also have an archer. Cast sleep on Cauthrien and the guards and direct the party to the library. Once in the library, wait for Cauthrien, who should now be in sole pursuit. Note that these tactics may prove unnecessary since simply running back down the hallway and entering one of the rooms as soon as the fight starts may be sufficient to isolate Cauthrien, and doing so prevents The Warden's party from being exposed to unnecessary damage from archers and her mage. At this point, use the character with the taunt ability to keep her in pursuit and away from the rest of the party, who should be using ranged attacks against her. Continue to run around the library using taunt, repeating until she is killed by the ranged attacks. An alternative method would be to freeze her with Cone of Cold from one of the party's mages and use melee fighters in the team to hit her until she goes down whilst using a support mage heal as necessary. At that point, her guards should be easier to defeat.
Should The Warden surrender to Cauthrien, another opportunity to fight her will arise when arriving at the Landsmeet where she will accost the party in order to prevent interference in the proceedings. At this point, she will only have a few guards with her, but both Cauthrien and her guards will need to be tackled at the same time since any fight will take place in a small room. Fighting her in the Arl of Denerim's estate may still prove to be an easier battle, provided Cauthrien can be isolated from her men.