Crackdown on non-disclosure agreements proposed

The Legal Services Board (LSB) launched a call for evidence this week on the misuse of NDAs. While it acknowledges the majority of NDAs are used legitimately to protect commercial sensitivities, it wants to explore the scale, extent and nature of misuse, understand why lawyers breach their ethical obligations, and consider ways to improve regulatory controls.

The #MeToo movement raised public awareness of NDA misuse: for example, NDAs were used to cover up the sexual assaults of Hollywood producer Harvey Weinstein. As the LSB highlights, NDAs can be used to conceal discrimination, harassment and bullying in a range of sectors, where ‘vulnerable individuals who are the targets of discrimination, harassment or abuse may be asked or coerced through an imbalance of power to sign [NDAs]’.

The LSB identifies several scenarios where NDAs could be lawful but unethical: for example, where a vulnerable individual does not understand their full rights and responsibilities but signs to end a grievance process. NDAs may also ‘perpetuate systemic imbalances of power’, and may ‘indirectly encourage or at least facilitate further criminal or inappropriate acts by protecting an individual who goes on to commit them’.

Matthew Hill, LSB chief executive, said: ‘We want to make sure that regulation supports—and, where necessary, insists on—standards of conduct that ensure, as far as possible, that NDAs are never used to cover up wrongdoing, silence victims or deprive people unwittingly of their rights.

‘This is something everyone across the sector should be concerned about, and we want to work collaboratively to ensure NDAs—which have a legitimate and important role to play in a wide range of circumstances—are always used appropriately and ethically. We’re interested in hearing from anyone with a view on this topic—whether the real experience of people who have been subject to misuse of NDAs, practitioners in this or related fields, regulators, representative bodies and others—to help identify solutions that uphold public confidence.’