Earlier this year, the Law Society of Northern Ireland released guidance on Non-Disclosure Agreements (NDAs). While the guidance applies across a range of legal contexts, it carries important implications in the context of claims involving allegations of abusive behaviour and safeguarding concerns, an area where confidentiality clauses have featured prominently in settlement agreements. 

The guidance maintains that NDAs remain lawful and clarifies the circumstances in which they may be appropriate. In doing so, the Law Society reinforces the importance of ensuring that they are used in a manner consistent with legal and regulatory obligations.

What is an NDA?

An NDA, also sometimes referred to as a Confidentiality Disclosure Agreement, is a legally binding contract requiring parties to keep certain information confidential. NDAs are commonly used to protect commercially sensitive information, personal data, or the terms of a settlement. 

Under the current guidance, NDAs must be drafted and applied in a way that is clear, lawful and consistent with wider regulatory requirements.

Use of NDAs in principle

The guidance recognises that NDAs serve a legitimate purpose, particularly in protecting confidential information and privacy. However, it emphasises that they should not be used routinely and should only be included where there is a clear and justifiable need.

Limits on confidentiality

Within the guidance, The Law Society has reinforced its stance that NDAs must not prevent individuals from:

• Reporting criminal conduct or cooperating with investigations, 
• Making disclosures to regulators or other authorities, 
• Exercising whistleblowing rights, 
• Seeking medical, professional or personal support. 

Public interest considerations

The guidance indicates that NDAs should not be used in a way that could restrict disclosure where there is a wider public interest. Additionally, they should not:

• Pressure a party into settlement
• Take unfair advantage of another party
• Obstruct or delay legal or regulatory processes

These principles may be relevant in cases where the subject matter extends beyond the immediate parties.

Suggested best practice

The guidance identifies a number of key features of an appropriate NDA, including ‘transparency’. The guidance submits that all parties should understand the terms and exceptions regarding disclosure and the associated risks if the NDA is breached. They have advised that it is prudent to recommend that each party seek independent legal advice and that parties should recognise any party who may be vulnerable or require additional support, such as a litigant in person.

Secondly, the guidance states that ‘clarity’ must be provided. It confirms that the language used should be plain and specific in order to confirm what information within the NDA is confidential and what each party’s responsibilities are. 

The Guidance also refers to ‘compliance’, reinforcing that the structure and content of NDAs should be reviewed to ensure that they comply with applicable laws (such as GDPR legislation) as well as the professional and regulatory obligations of solicitors. 

Application to civil claims

In the context of non-recent abuse claims, settlement agreements may include confidentiality provisions. The guidance does not prohibit such provisions, but highlights the need for careful drafting and appropriate scope. 

This includes ensuring that confidentiality clauses are clearly defined, limited to the appropriate subject matter, and do not restrict lawful disclosures. The guidance also highlights the importance of ensuring that parties understand the terms of the agreement, particularly where one party may be in a more vulnerable position.

Practical considerations

Organisations and insurers may wish to review existing NDA templates and settlement arrangements to ensure that they are compliant with the guidance and ensure that confidentiality provisions are proportionate and clearly expressed. 

Conclusion

The updated guidance does not represent a prohibition on NDAs, but introduces a clearer framework governing their appropriate use. In the context of non-recent abuse civil claims, this is likely to result in a more structured and cautious approach to confidentiality provisions.

NDAs will continue to be used where appropriate, but within defined limits that ensure compliance with legal obligations and recognition of wider public interest considerations.