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SRA and BSB warning on NDAs

The Times has revealed that eight law firms are being investigated over the misuse of non-disclosure agreements (NDAs) (or so-called “gagging orders”) to silence alleged victims of sexual abuse, more than doubling the number of claims under investigation by the Solicitors Regulation Authority (SRA) since April this year.

The rise in the number of investigations comes amidst increasing social recognition of the prevalence of sexual harassment claims in the workplace, which has followed the global #MeToo movement, and the revelation that NDAs have been, and are being, used to suppress information about illegal behaviour in the workplace.

In March, the SRA issued a warning notice reminding law firms that NDAs should be confined to their proper function; that is, to protect commercial interests and confidentiality, and in some circumstances, to protect reputation. The SRA’s warning notice made clear that NDAs must not be used to prevent, or exert inappropriate influence over, subjects from reporting instances of misconduct and illegality to law enforcement agencies and regulators, nor should they be used as a way to circumvent the notification requirements contained in the SRA Handbook.

The Bar Standards Board (BSB) is also set to issue a similar notice to all barristers in England & Wales, which will warn barristers to avoid drafting NDAs seeking to prevent alleged victims from approaching relevant authorities. Barristers will be warned that if they do so they risk being in breach of the core duties of the BSB Handbook.

Maria Miller MP, chairwoman of the Commons women and equalities committee, is quoted by The Times as welcoming the new regulatory guidance, but believes that action by professional regulators alone will not be enough and that there needs to be broader legislation implemented to stop the misuse of NDAs.

Whilst it is recognised that NDAs continue to serve a legitimate purpose in protecting commercial and confidential interests, it is likely, in the wake of the #MeToo movement, that NDAs past, present and future, will continue to come under increased scrutiny to ensure legitimacy and that they do not restrain alleged victims from reporting their experiences with the relevant authorities.

The Times article can be found here: https://bit.ly/2yavsDw

2018-10-08T15:12:08+00:00October 8th, 2018|