Confidentiality is an important concept across many industries. Everyone agrees that some amount of personal protection of information is appropriate and that problems are created when certain information is improperly accessed.
We probably most frequently hear about issues involving data breaches at large enterprises that result in our personal information being released to criminals. We also hear a lot of talk about confidentiality in the context of businesses, including social media companies, that contend that they should be entitled to use and sell a customer’s information. Customers often disagree, and this discussion is still taking place in America.
On the other hand, companies sometimes protect information to the extent that it frustrates law enforcement. A recent example is Apple’s reluctance to unlock a criminal suspect’s iPhone.
Finally, and perhaps discussed less often, is a mutual agreement between individuals or businesses to keep information confidential. Sometimes, the agreement seems to make sense. Other times, one could argue that society is harmed by the restriction of information.
How do confidentiality provisions in settlement agreements work?
When a plaintiff files a personal injury lawsuit in court, it is a public record. If the case goes to trial, the public is free to attend and watch the trial and hear the verdict returned by the jury. Thus, the entire world can learn whether a plaintiff received a lot of money, nothing at all, or something in between. The public can hear all the evidence about the cause of the harm and the injuries to the plaintiff.
But the truth is, the great majority of cases never reach trial. Most cases are resolved and settled between the parties. As part of the process, the parties in the case enter into a settlement agreement, which is a binding contract between the parties. These settlement agreements sometimes contain confidentiality provisions (often called “non-disclosure agreements” or “NDAs”) that prohibit either party from publicly disclosing the terms of the settlement.
Differentiating contractual confidentiality provisions and other legal confidentiality requirements
In some instances, the law provides for confidentiality, whether the parties enter into an agreement or not.
For example, medical documents governed by HIPAA cannot be released without a patient’s permission. Similarly, juvenile court records and records gathered and created by many public bodies are confidential.
In contrast, confidentiality provisions in personal injury settlement agreements are private contractual provisions agreed to by the parties to a particular case.
Who Wants the Confidentiality Provision in the Personal Injury Settlement?
On occasion, both parties want the agreement. For safety or privacy reasons, a plaintiff who receives a large sum of money may not want the public to know.
However, in the great majority of cases, it is the “losing party,” i.e., the party paying the money, who wants to keep the information secret. In many cases, this is because the defendant does not want to admit liability.
For example, a doctor who committed malpractice may fear that his or her reputation and practice will be harmed if information concerning the malpractice case is readily available to the public. Similarly, a trucking company or automobile driver that causes an accident may not want the public to have access to the information. Moreover, insurance companies may fear that litigation will be encouraged if people realize how much money is paid in certain cases.
Should confidential settlement agreements (NDAs) be allowed?
There are arguments to be made on both sides. There certainly seem to be times that the public is harmed by keeping information confidential. For example, a doctor or hospital guilty of medical malpractice can settle a case, require a confidentiality agreement, then deny they did anything wrong. In this case, the public is less aware that it might be safer to consider another medical care provider.
Similarly, other wrongdoers, such as negligent trucking companies or those who commit intentionally wrongful acts, can arguably hide their bad behavior from the public. This can clearly result in harm to society.
On the other hand, a plaintiff may not want personal medical conditions and injuries to be available to the public or for the public to see how much money he or she received. Moreover, sometimes defendants legitimately deny doing anything wrong but are willing to pay a settlement to avoid litigation. They have a legitimate interest in confidentiality.
Finally, defendants will sometimes pay a bigger settlement if they are promised a non-disclosure agreement. Therefore, the confidentiality agreement may increase the settlement amount for a particular plaintiff, although the information is hidden from the public.
Call with Questions
If you have suffered personal injuries as a result of medical malpractice, a semi-truck accident, an automobile collision, or any other wrongful behavior, please call us with your questions. We will help you in any way we can. The experienced personal injury lawyers at Nelson MacNeil Rayfield help victims all over Oregon. We believe it is imperative to hold wrongdoers accountable for their actions so that everyone in Oregon will be safer.