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SRA speaks out against misuse of NDAs

13rd 03 2018

An article by Tom Baker for Legal Business online. This article was originally published on 12th March 2018 and can be found here: https://www.legalbusiness.co.uk/blogs/metoo-sra-puts-foot-down-on-non-disclosure-agreements/
 
 
 

With the profession rocking from multiple allegations of sexual harassment against law firm partners recently, the Solicitors Regulation Authority (SRA) has today (12 March) taken action to combat the misuse of non-disclosure agreements (NDAs).

In a warning notice on the regulator’s website, the SRA has stipulated that NDAs would be improperly used if they sought to prevent a person from reporting misconduct to the police or other prosecution or regulatory authority.

According to the notice, the new guidelines also aim to stamp out the threat of litigation as a means of stopping people from disclosing misconduct. Specifically, the SRA has warned against using defamation proceedings as a threat ‘where such a claim is known to be unsustainable’.

While not explicitly incorporated into the SRA’s handbook, the regulator has cautioned that failure to comply with the new terms will run the risk of disciplinary action.

In a press release, the SRA has cited a ‘widespread reporting of the perception that NDAs, alongside cultural issues within some firms, are resulting in low levels of reporting of inappropriate sexual behaviour’. Between November 2015 and October 2017, the SRA received 21 complaints relating to these kinds of behaviour.

SRA chief executive Paul Philip commented: ‘The public and the profession expects solicitors to act with integrity and uphold the rule of law. And most do. NDAs have a valid use, but not for covering up serious misconduct and in some cases potential crimes.’

Baker McKenzie was most recently caught up in controversy at the beginning of this year, as it emerged it had sanctioned a partner following an allegation of sexual assault. A settlement was agreed with the junior lawyer who raised the complaint, which included confidentiality obligations on the firm and complainant.

The first connection between law firms, sexual harassment and  NDAs emerged when magic circle outfit Allen & Overy (A&O) was reportedly involved in a historic incident over the Harvey Weinstein scandal.

A&O was named in an Financial Times article as brokering an NDA with Zelda Perkins, an assistant of the Hollywood producer who accused him of sexual harassment in 1998. Perkins later broke the NDA after speaking out late last year.

A&O declined to comment. Baker McKenzie was contacted for comment.

 
 
 
 
Original article written by Tom Baker, can be found here: https://www.legalbusiness.co.uk/blogs/metoo-sra-puts-foot-down-on-non-disclosure-agreements/