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The role of the solicitor advising on the inclusion of an NDA
Solicitors, as legal professionals, have a crucial role to play in drafting, enforcing, and/or advising on a settlement agreement, including non-disclosure agreements (‘NDAs’) or confidentiality clauses, as they are sometimes called.
The regulator of solicitors in England and Wales (the ‘SRA’) has provided guidance to solicitors on the use of NDAs. Solicitors often advise on policies and training, advise employees or employers during disciplinary or grievance processes, and assist with employment litigation and employment tribunal claims.
NDAs are usually part of a settlement agreement between an employer and an employee or worker. Legal professionals advise both individuals and companies on their rights and obligations regarding NDAs.
SRA Warning Notice
The SRA issued an updated warning notice to solicitors and law firms on the use of NDAs and this makes it clear that improperly using NDAs could constitute a breach of one or more of the SRA Principles, which prioritise the wider public interest over an individual client’s interests. The Law Society and Equality and Human Rights Commission have also provided guidance on NDAs. The SRA expects legal professionals to act with honesty, integrity, independence, and to uphold the constitutional principle of the rule of law and public trust and confidence in the solicitors’ profession.
The weight of this guidance indicates solicitors must not facilitate the use of inapropriate NDAs which prevent or deter employees from reporting wrongdoing to a regulator or the police or discussing it with their advisers and medical professionals or as othewise required by law. However, the general practice of requiring confidentiality of the terms and existence of a settlement remains valid subject to these exceptions.
Legal Service Board Call for Evidence on use of NDAs
In May 2023 the Legal Service Board (‘LSB’) which is the overarching regulator that regulates all of the seperate legal regulators of solicitors, barristers and legal executives, launched a call for evidence on the misuse of NDAs. The introduction of this call for evidence recognised “a (lawful) NDA is a legally enforceable agreement under which it is agreed that information will be keptconfidential. They are frequently used in employment and commercial contexts and are often used legitimately as a means for companies to ensure the confidentiality of sensitive business information, for
example, in advance of the sale or purchase of a company”. But the paper goes on to say “there is evidence of misuse of NDAs to conceal unlawful activity, such as discrimination, harassment or abuse, or other types of wrongdoing which are not illegal, such as bullying that does not
amount to harassment…which are illegitimate and/or unethical NDAs”.
The LSB call for evidence goes on to say “vulnerable individuals who are the targets of discrimination, harassment or abuse may be asked or coerced through an imbalance of power to sign them” and that gives rise to a question about the ethical conduct of the legal professional ithat assisted, enabled and/or facilitated such misuse of NDAs, and whether existing regulatory arrangements are sufficient to address this. Put simply, the question is whether the current regularory regime is adequate in terms of regulating legal professionals role in the use of NDAs.
The LSB’s call for evidence closes 4 July 2023
