Legislation pledged to prevent abuse of NDAs
By Gazette newsdesk >>
(28 March 2024)
The government has announced a crackdown on the misuse of non-disclosure agreements.
Legislation will be introduced ‘as soon as parliamentary time allows’ to ensure victims are no longer prevented from accessing legal advice and other support, lord chancellor Alex Chalk MP said yesterday.
The law will clarify that NDAs cannot be legally enforced if they prevent victims from reporting a crime. It will be stipulated that information related to alleged criminal conduct can be disclosed, without fear of legal action, to the police, regulated lawyers and other support services such as doctors.
Other parts of NDAs, including provisions relating to financial agreements, will retain their legal effects.
‘We are bringing an end to the murky world of non-disclosure agreements which are too often used to sweep criminality under the carpet and prevent victims from accessing the advice and support they need,’ said Chalk.
Victims and safeguarding minister Laura Farris MP said: ‘Sexual harassment is unlawful in the workplace, and it is unacceptable that a few unscrupulous employers have previously sought to construct confidentiality clauses in settlement agreements that suggest victims cannot report a crime to the police. This has never been the case and today we are making that crystal clear in law.’
The Law Society and Bar Council welcomed the announcement. ’There should be no provision in NDAs that prevents disclosures to the police, regulated health and care professionals, and legal professionals,’ said Society president Nick Emmerson. ‘Government should also legislate to ensure limitations in confidentiality clauses are clearly set out in employment contracts and settlement agreements, and to enhance the independent legal advice received by individuals signing confidentiality clauses and NDAs.’
Bar chair Sam Townend KC said NDAs are ‘ripe for legislative change’, adding: ‘Some NDAs are abusive in nature. NDAs can’t cover criminal acts, and under existing common law protections many are already unenforceable. But those who are asked to sign them are not always aware of the relevant legal principles and may not have timely access to legal advice. Legislative change should aim to put these matters beyond doubt. Getting the wording and definitions right will be important.’
The announcement was also welcomed by Zelda Perkins, who began campaigning for NDA reform in 2017 after breaking an agreement she signed with her former employer Harvey Weinstein. Perkins told the Gazette: ‘This is an important step forward in protections for victims of crime and shows that the Ministry of Justice is recognising not only the chilling effect NDAs have on reporting crimes, but the ethical issues this raises legally when creating aggressive confidentiality clauses in contracts. There is much more work to be done and I hope that this, along with the clear evidence from the LSB and SRA reports into the misuse of NDAs, will give the regulators the confidence to reform their guidance significantly.
‘The time of confidentiality clauses being used as weapons of threat to protect perpetrators’ reputations is coming to an end.’
(Courtesy: The Law Society Gazette)