The end of NDAs?

Non-disclosure, or confidentiality, agreements, also known as NDAs or CDAs, keep hitting the news headlines. Most recently, because Isabel Oakeshott, a journalist, has deliberately breached an NDA that she signed with the former UK Secretary of State for Health, Matt Hancock. The information that she has been disclosing this week, in carefully measured dollops, consists of the contents of his WhatsApp messages with colleagues in government during the Covid crisis.

Ms Oakeshott claims she is acting in the public interest, though whether she is arguing that this is (or should be) a legal defence to an action for breach of confidence is not clear. IP Draughts is more familiar with public interest defences or exceptions in other areas of law, such as employee whistle-blowing, freedom of information requests, and data protection. But for straightforward “commercial” NDAs, it is not a conventional defence.

The Hancock disclosures that IP Draughts has seen appear to be gossipy, ad hoc conversations among policy makers, rather than formal policies or evidence of fundamental wrongdoing. They’re a bit tawdry, and show politicians in a poor light, but no worse. Should politicians be able to have such conversations away from the public gaze? Probably, yes. In other words, the information meets the first of the three limbs for a breach of confidence action, as articulated by Megarry J in Coco v Clark, in that the information has the “necessary quality of confidence”.

A while ago, NDAs were in the news for a different reason. Individuals who settled their sexual harrassment cases against prominent individuals (eg Harvey Weinstein) were often asked to sign an NDA as part of the settlement. Greater awareness of the potential unfairness of NDAs in such circumstances has led to promises not to use them in future, eg in UK universities. And the Solicitors Regulation Authority has waded in, warning of potential misconduct by solicitors who advise on NDAs that are used unfairly.

Do these developments signal the end of NDAs as a familiar contractual mechanism? In IP Draughts view, no. They illustrate some of the weaknesses of NDAs as a guarantee of secrecy, and the ethical issues that can sometimes arise. But NDAs, together with confidentiality terms in larger agreements, will continue to be used as a legitimate mechanism for protecting business secrets.

For further information on the content of NDAs, together with a summary of English law in this field, see our book Drafting Confidentiality Agreements (third edition, Law Society Publishing).