At last we are moving away from a state of limbo over NDAs

24 January 2019

NDAs and Brexit have this in common. Whilst many may be unhappy and confused with the current position, consensus on the way forward has thus far proved elusive.  That may now be changing.

The process began last year in light of the #Metoo campaign and in the aftermath of the Presidents Club Dinner at the end of January 2018.  First, the Solicitors Regulation Authority (SRA) issued a Warning Notice in March making clear that whilst NDAs were not prohibited per se, they could not be used as a means of improperly exerting inappropriate influence over those who might otherwise be minded to disclose what had happened to them. 

Then in July 2018, the House of Commons Women and Equalities Committee (WEC) issued a report asking the Government to standardise NDAs and make it an offence for them to be misused.

In October we learned the Court of Appeal had imposed an injunction on the Telegraph (they thought) preventing the publication of Sir Philip Green’s name in the context of various employee complaints about his conduct. Green was subsequently named by Lord (Peter) Hain in the House of Lords, but the Court of Appeal Judgment made it clear that public policy would support an NDA agreed without improper pressure, with the benefit of legal advice, and provided due allowance was made for disclosure to the Police or other Regulatory/Statutory body.

The Government (slowly) began to intervene in the debate.  The same month, Mrs May announced NDAs were not to be used to cover up “criminal activity". On 18 December 2018 her Ministers announced a consultation on the use of NDAs. 

In the meantime, the WEC intervened again by announcing a follow up enquiry, this time looking specifically at the wider use of NDAs in cases where any form of harassment or discrimination has been alleged. 

Now the Law Society has stepped in. On 7 January 2019 they published their long awaited Practice Note.  It clarifies that there is nothing indigenously wrong with NDAs, but when they are drafted, lawyers must maintain not just the trust of their Client, but the public in general.  In particular, they must not prohibit an employee from making a criminal complaint, or raising an issue with the relevant regulator or “blowing the whistle”.

This may only be the Law Society’s “view” of good practice, but importantly, the Practice Note is expressly based upon specific provisions in the SRA Handbook. 

So whilst many questions remain to be answered, and there is undoubtedly further debate to come, it is clear that we are moving away from a state of limbo.  We now know as lawyers, NDAs are not wrong in principle, but amongst other safeguards (see above), we must have regard not just to our own client’s interest, but the interests of the public as a whole. 

For some this may mean a different sort of dialogue with our clients, but that is something we are going to have to get used to.

First published in The Times on 24 January 2019

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