More tightening of rules needed on law firms’ use of NDAs, expert tells MPs

The Solicitors Regulation Authority (SRA) should tighten its rules on non-disclosure agreements (NDAs), MPs have been told.

NDAs are used by organisations to protect themselves from reputational damage, for example, to guarantee a former employee’s silence where there has been inappropriate behaviour by a superior in return for payment. However legal ethics expert, Professor Richard Moorhead, has submitted evidence to MPs on the House of Commons’ women and equalities commission which shows that NDAs may often include clauses that are void, and are too frequently drawn up with little understanding of SRA rules.

As Legal Futures reports, Moorhead framed the problem within the profession’s wider approach to ethics, which he described as “minimalistic”. One problem relating both to NDAs and the profession’s wider approach is the misconception that clients’ interests remain paramount regardless of the situation, which is not the case under SRA rules.

The SRA has already told law firms not to use NDAs to prevent the reporting of misconduct, particularly sexual harassment involving employees or clients. Nonetheless, Moorhead believed that more should be done to tighten the rules. He said: “As well as being wrong under the rules, a model of professional ethics which relies on treating the client interest as paramount risks practitioners making significant mistakes…Basic understandings of the Code of Conduct are not well embedded within practising ranks. This needs to be addressed by stronger enforcement, better education, and improved training and management in law firms and in-house legal teams.”