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No ‘one-size-fits-all’ approach to NDAs
Following research that found the majority of lawyers have never advised clients that non-disclosure agreements are optional, a partner from a compensation firm explained the steps that should be taken to secure an appropriate settlement.
Naomi Neilson
A report from Sharmilla Bargon from the Redfern Legal Centre and Regina Featherstone from the Human Rights Law Centre revealed that almost 30 per cent of applicant lawyers and 50 per cent of respondent lawyers have never given their clients an option other than signing a non-disclosure agreement to settle their matter.
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In conversation with Lawyers Weekly at the time, the authors said lawyers have defaulted to a “clause that has helped them for 20-odd years”, and education is needed to shift away from this mindset.
It is also critical to avoiding disciplinary action, with Maurice Blackburn principal lawyer Mia Pantechis adding that a failure to advise clients about their options “ultimately denies them agency and an opportunity to secure objectives that may be really important to them in resolving what are very serious matters”.
Speaking to Lawyers Weekly after the research was released, Travis Schultz & Partners special counsel Stephen Hughes said it is important that lawyers in this space clarify “alternative options and potential outcomes to ensure they’re comfortable”.
“Even though there are typically standard terms and conditions provided in legal matters, it’s important for parties to understand that they can question, modify, or remove specific clauses to suit their individual needs and circumstances,” Hughes said.
“There is no ‘one size fits all’.”
Hughes added that a settlement agreement requires that all parties involved have “ample time” to consider the terms, allowing them to “seek support and be comfortable with accepting the terms of suggest alternative wording for any points still in dispute”.
Any changes to one clause will then have to be reviewed against other clauses to ensure that nothing is “unwittingly and unintentionally” affecting the operation of the entire settlement.
“An open dialogue between the lawyers is also critical to ensure that the challenges in achieving a settlement can be successfully overcome,” Hughes explained.
As part of Bargon’s and Featherstone’s research project, the two collaborated with Clayton Utz to create model confidentiality clauses.
While it is important to note that the models should be adapted depending on each party’s needs, they have provided some guidance as to how to prepare a settlement agreement.
In the document, the model proposes swapping blanket confidentiality clauses for other options, including clauses that permit certain exceptions or those that cover only parts of the settlement.
“It is necessary to tailor the statement to the facts and circumstances of a particular matter or dispute,” the document added.
