Clients who felt let down by their own solicitors in disputes involving non-disclosure agreements are among the respondents to a survey which is likely to lead to regulatory curbs on DNAs. ‘Essentially, a solicitor told me the money I was being offered was enough to prevent me from considering going to tribunal and I should probably just move on with my life,’ one respondent complained. Another reported that the advice they received was ‘transactional because the lawyer advised them not to fight their employer and to negotiate a higher payout’.
The examples appear in a summary report of evidence on the use and misuse of (NDAs), published by the Legal Services Board oversight regulator today. The evidence suggests ‘a potential overuse and misuse of NDAs, where the intention is to cover up misconduct, intimidate or silence people’.
The key themes emerging from the submissions include:
- Imbalances of power such as employer/employee, divorce proceedings or consumer disputes,
- Potential access to justice issues for individuals in employment disputes, particularly in respect of lack of access to legal advice,
- Members of the public lacking understanding about legal rights and NDAs, specifically in relation to protected disclosures, covering up allegedly illegal conduct including unlawful harassment and discrimination,
- NDAs can have an adverse effect on individuals personally and professionally, particularly where there are clauses that bar individuals from sharing the NDA with friends or family.
The super regulator conceded that several respondents, including the Law Society and Solicitors Regulation Authority, submitted that NDAs have legitimate uses in settling employment disputes and protecting commercial information and intellectual property.
However overall the role of solicitors appears to be a particular source of complaint. ‘The senior partner at [unnamed law firm] made me feel ridiculous for trying to pursue legal action and made it clear that I would be destroyed if I chose to pursue this through the courts,’ one respondent said.
The LSB said the call for evidence received over 100 responses in total, including from 74 individuals sharing personal experiences with NDAs. These responses reflected instances of how NDAs have been used in industries such as entertainment, higher education, professional services (including the legal profession), charities, the public sector and private sector, the LSB said.
It acknowledged gaps in its methodology – for example that people who were happy with the negotiation of an NDA would be less motivated to get in touch. However it said the evidence will form part of the LSB’s ‘gap analysis’ to determine whether the existing regulatory framework sufficiently accounts for ‘these types of unethical conduct’ – or whether further regulatory intervention is needed.
‘We’re grateful to those who contributed their experiences to this call for evidence, to help shed light on an area of legal practice that is by its very nature secretive,’ said chief executive Matthew Hill. ‘The recurring themes highlighted in this report show that where NDA misuse occurs, it can have a devastating impact on people’s lives.
‘We want to see a legal sector that provides high quality legal services and strong professional ethics, where the conduct of lawyers is consistent with upholding the rule of law,’ Hill said. ‘This report forms an important part of our evidence base as we consider whether the regulatory framework may need to be adapted to help realise this ambition.’
