I never used my legal training, and in some important ways I’m sadly out of date: this is one of them. Confidentiality agreements used to refer to the protection of internal information relating to a business; they have become a means of silencing criticism, something quite different. I was sufficiently perplexed by the reports of the current affairs relating to Philip Green to want to read the Court of Appeal’s judgment.
The fundamental problem, barrister Jolyon Maugham has written, is that the Court of Appeal has failed to take account of the imbalance of power. Obviously enough, the gagging orders are taken by people in a position of privilege against less powerful employees, usually women. “How did the Court miss this?” It didn’t miss it, but it did wave it aside. In paragraph 42, the Court notes that it is hard to get a settlement of litigation without an NDA; in paragraph 43, they refer to agreements as valid if they are not subject to pressure. Pressure is built in to the process.
The Court takes the view that a settlement of litigation can routinely include a rule of confidentiality. At the start of the judgment, the Court considers the NDA as a subordinate part of the Settlement Agreement. “There were terms in each of the Agreements under which both sides undertook to keep confidential the subject matter of the complaints themselves and various associated matters, including the amounts paid by way of settlement. … We will refer to this aspect of the Settlement Agreements as non-disclosure agreements (NDAs).” After that, however, it refers consistently to “the duty of confidentiality”. The Court took it that confidentiality should be presumed to be upheld unless there is a strong element of public interest which requires otherwise – and held the hearing in private session on that basis. That should not be taken for granted.
There are three problems with applying a rule of confidentiality. First, it has not been established whether there is such a duty; the Settlement Agreements apparently make exceptions for certain lawful actions and, as the Court itself recognises, “confidentiality could not be relied on to conceal wrongdoing.” The rules are supposed to protect confidential information, but there is no “information” in this case; the main thing being held in confidence is the agreement. Openness is fundamental to justice.The presumption of confidentiality on the basis of a Settlement Agreement is illegitimate; it has to be justified.
Second, if there is a duty, it is not owed by the Daily Telegraph, which on the face of the matter had already been informed about the existence of the Settlement Agreements and the NDAs. That already constitutes, in the terms of another set of laws, publication: the knowledge in question has been conveyed to a third party. If there is any breach, the breach is by signatories, and action lies against them. The substance of this action depended on a supposition that if there had been a leak by one of the parties to an NDA – that has not actually been established – any duty of confidentiality they owed to the other party must be extended to the newspaper. I think it could be argued that talking to a newspaper magnifies the offence of someone breaching an agreement; I cannot see that the newspaper owes any duty of confidentiality to either party. There is no justification for preventing publication, unless in some way the newspaper itself violates the complainant’s rights in the process. In this case, there is no indication that the Telegraph has acted improperly in any way.
The third point is the one that runs deepest. The Court of Appeal has taken a view about the confidentiality of settlements which is inconsistent with the Rule of Law. The Supreme Court’s recent judgment in the Unison case emphasises the essential nature of access to justice.
The constitutional right of access to the courts is inherent in the rule of law. … Access to the courts is not … of value only to the particular individuals involved. … it is not always desirable that claims should be settled (my emphasis) … the value to society of the right of access to the courts is not confined to cases in which the courts decide questions of general importance. People and businesses need to know, on the one hand, that they will be able to enforce their rights if they have to do so, and, on the other hand, that if they fail to meet their obligations, there is likely to be a remedy against them. It is that knowledge which underpins everyday economic and social relations.
It seems to me that the Court of Appeal has lost sight of this fundamental principle. They have treated a settlement agreement as virtually equivalent to access to justice; it cannot be. A private agreement to avoid litigation may be beneficial, but it cannot bind others, it cannot remain secret, and it cannot be treated as the last word.