Full disclosure: be careful with NDAs - Colin Hulme

The journalist Isabel Oakeshott’s disclosure of 100,000 texts and WhatsApp messages between Matt Hancock, the former health secretary, and other politicians and government officials may be one of the highest profile breaches of a non-disclosure agreement (NDA) in recent times.

Such is the scale of the cache that it is likely the content will be driving news stories for days and weeks to come.

When I first heard this story reported, my initial reaction was to wonder if Hancock had properly covered himself with a confidentiality agreement before releasing such sensitive material to a journalist.

His statement in response to the story suggests he did, pointing to “legal confidentiality” and a “process approved by the Cabinet Office”, and Oakeshott has since admitted to breaching an NDA.

Journalist Isabel Oakeshott has admitted breaching an NDA by leaking more than 100,000 messages from Matt Hancock and government ministers

Oakeshott has sought to justify her decision to release the messages by saying she was "acting in the overwhelming national interest", adding "anyone who thinks I did this for money must be utterly insane".

NDAs are a very common mechanism to allow confidential information to be disclosed by one party to another for a specific purpose while preventing disclosure for any other purpose. Businesses and other organisations typically use them if they are going to explore opportunities to collaborate on a project and there is a need to share confidential information to enable them to do so.

They also often feature as part of settlement of a dispute, to avoid the terms of a settlement being made public. Typically, an NDA includes a joint statement agreed by the parties to the settlement, ensuring restraint with regards to what is disclosed in public. Generally speaking, it is in neither party’s interests to “air their dirty laundry in public”.

The extent of the confidentiality obligations under standard NDAs will have limits. For example, the receiving party can disclose information which is in the public domain or for other regulatory purposes, such as audits.

Colin Hulme is Partner and head of intellectual property, Burness Paull

Despite NDAs being a standard document in business, they have come in for some bad press recently when the extent of their use by some businesses to conceal sexual harassment of employees was revealed, particularly following the #MeToo movement. At its worst, there have been allegations of such misconduct being covered up by the making of a payment in exchange for the silence of the victim. However, confidentiality provisions are still otherwise very standard when settling employment claims and documenting an employee’s departure.

This takes us to an important limitation on the overall effect of NDAs. They cannot be used to prevent genuine whistleblowing of misconduct, whether that is sexual harassment or some other criminal conduct. Employment settlement agreements require the employee to take independent legal advice and it is now standard (and an ethical requirement) for these agreements to contain a carve-out to allow public interest disclosures.

Although not an employment case, Oakeshott has pointed to the public interest to justify the disclosure. This defence may not be straightforward. Whilst it may well be in the public interest for certain information concerning what went on behind the scenes during the pandemic to be disclosed, Hancock asserts that all of this information has already been provided to the public inquiry.

It is not a great surprise that Oakeshott and The Telegraph did not give any notice prior to release of their story. It is open to the disclosing party to seek an interim injunction to prevent a breach of an NDA and that can be sought at very short notice. If an injunction is secured, it would be a contempt of court to release information in breach of the NDA.

In the event that the opportunity to prevent disclosure of information in breach of an NDA is lost then it may be possible to seek financial compensation for damage resulting from the breach, as well as repayment of any sum paid under the NDA. Even if the horse has bolted, some recompense can be sought.

NDAs are an effective and standard device for securing information which should legitimately be kept confidential. But care must be taken when agreeing their terms and expert legal advice should be obtained by all parties involved. Breaching an NDA, either deliberately or accidentally, could carry significant consequences.

Colin Hulme is Partner and head of intellectual property, Burness Paull