Non-Disclosure Agreements - updated guidance from the SRA

What is new?

The Solicitors Regulation Authority (SRA) has updated its guidance on the use of Non-Disclosure Agreements (NDAs) – importantly it has made it clear that this is relevant to all NDAs regardless of the context in which the NDA arises. The guidance also makes clear that what is meant by "NDA" is any form of agreement or contract, or a clause within a wider agreement or contract, under which it is agreed that certain information will be kept confidential. This includes agreements with individuals and other commercial parties.

What is the background?

The SRA initially issued a warning notice about the use of NDAs in March 2018. This was in the context of the #MeToo movement and specifically the improper use of NDAs in relation to sexual misconduct which prevented people who had experienced sexual harassment from reporting it to the relevant authorities. It has been updated since then.

What does this mean?

The updated guidance provides a reminder of some of the key issues and risks that those dealing with NDAs need to be aware of and the obligations regulated persons have under the general SRA's Code of Conduct. It says it is particularly concerned to ensure that NDAs are not used to prevent reporting to it or to other regulators and enforcement agencies or to prevent disclosures which are protected by law. The guidance states that clauses used must not prevent any such disclosure or give the person expected to agree the NDA the impression that this kind of disclosure is prohibited. This includes other terms in the agreement which might serve to inhibit permitted reporting by way of their operation.

How does this affect me?

The guidance now has a much broader application and must be considered by anyone regulated by the SRA in whatever situation an NDA (including confidentiality clauses within the context of any wider agreement) is being considered. It will be applicable to in-house lawyers and regulated individuals who manage human resources and complaints in law firms as well as relevant individuals in law firms. It also serves as a reminder to review and update precedents which seek to impose confidentiality obligations on a signatory to ensure they are current and fit for purpose.

The latest guidance is available here.