Law Society set to snub MPs’ call for NDA guidance review


Moorhead: Law Society guidance is disappointing

The Law Society has indicated that it has no plans to review its controversial practice note on non-disclosure agreements (NDAs), despite the urging of MPs.

But it may have over-egged the support the note has from the Solicitors Regulation Authority (SRA).

In its report this week on the use of NDAs in discrimination cases, the House of Commons women and equalities committee said the society’s note “needs revisiting”.

It was endorsing the view of Richard Moorhead, professor of law and professional ethics at UCL and a special adviser to its inquiry, who has described the guidance as “a disappointing document that shows no ethical leadership in the field”.

He explained: “It appears more concerned about asserting the legitimacy of using NDAs than it does about dealing effectively with the risks.”

The wording, he said, “suggests that substantiated allegations of potentially serious wrongdoing can nonetheless be subject to obligations of confidentiality to protect reputation”.

The society sought to defend the practice note recently but did not address any of the detailed criticisms.

Responding to the report, a Law Society spokesman said: “We have sought to lead an open and frank discussion within the legal community about the use of NDAs and confidentiality clauses.

“This includes supporting solicitors to navigate the complex legal, regulatory and ethical boundaries.

“As the women and equalities committee report sets out, a number of improvements can be made to protect employees more effectively – such as widening access to legal aid and improving the tribunal process.

“We regularly review our guidance to solicitors and update as law and regulations evolve.”

The spokesman declined to commit to a review in light of the committee’s call.

In defending the note earlier this month, Law Society deputy vice-president David Greene stressed that it was written “with input” from the SRA and that the “SRA welcomed our guidance”.

Asked by Legal Futures about its role in reviewing, and support for, the practice note, an SRA spokesman would only say: “We reviewed an early version of the Law Society’s practice note.”

Professor Moorhead said the practice note was “less restrictive” in its approach than the guidance on NDAs issued by the SRA.

“As an example, they [the Law Society] say that ‘Blocking the reporting of information that is relevant to regulating a sector is likely to be unacceptable to regulators’, keeping open the possibility that it is legitimate in certain (unspecified) circumstances.

“They do not consider at all the possibility that it might be a criminal offence or professional misconduct to so block information.”

Other failures included not saying that the drafting lawyer has to make their confidentiality clause clear and intelligible to those expected to be governed by them.

“This is in spite of the risk that drafting opaque clauses which have the effect of overplaying the extent of confidentiality obligation and underplaying the extent of any exceptions puts the solicitor at risk of breaching the SRA Code of Conduct (through taking unfair advantage of their client’s opponent).

“I am confident from my discussions with employment lawyers that this kind of obfuscation is a reasonably common practice designed to strengthen the hand of employers and accused executives benefiting from such agreements.”

Professor Moorhead argued that the practice note was “consistent with an approach which seeks to represent the interest of some of its members (employment lawyers) in doing what they, and some of their clients… Consideration of the public interest is most politely described as muted”.




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