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Confidentiality Clauses in Personal Injury Settlements

Gilreath injury attorneys discuss important factors to consider before signing a non-disclosure policy in a civil lawsuit

Confidentiality agreements, also known as non-disclosure or secrecy policies, are contracts entered upon by two or more parties in which all parties agree that certain specified information (sensitive material or trade secrets) will remain confidential.

Most of us have signed some form of confidentiality agreements at least once—typically given to us by an employer. Companies often require potential hires to sign one as a condition of employment. That way, the company's private information is protected under a legally binding contract from leaving the workplace and getting into the hands of competitors.

But while pre-employment confidentiality agreements are fairly straightforward and an obvious necessity, the implications of non-disclosure agreements in civil lawsuit settlements are a much more complex issue, which is why most people need the help of an experienced personal injury attorney to make sure that signing an agreement is in the best interests of the public and themselves.

What's wrong with confidentiality?

Confidentiality is not always a bad thing. In fact, non-disclosure policies are beneficial to the litigation process in certain ways. For instance, all consultations between an attorney and their client are generally understood to be confidential, and settlement negotiations with the other party may benefit from similar non-disclosure terms.

Also, confidentiality agreements are often used in cases that may expose industry or trade secrets. This way, companies can deal with individual legal claims without fearing that their competitors will be able to uncover private information and use it to undermine them.

But sometimes there are valid reasons to oppose confidentiality.

Perhaps you and your attorney have labored for months, getting your case properly prepared for trial, when at the last minute you and the other side finally come to a settlement resolution, cancelling the need for a lengthy and costly trial. Both sides are satisfied, and everyone walks away pleased with the outcome.

Unfortunately, when reviewing the settlement agreement a couple weeks later, you notice a confidentiality clause that prohibits you from disclosing the settlement terms and other details about the case. While this may not be a problem in some cases, secrecy may be unacceptable in others.

Plaintiffs often object to non-disclosure clauses because they are angered and frustrated by what the defendant did and believe what happened to them should be public knowledge. Defendants, on the other hand, push for confidentiality to protect their name or public image from being tarnished by a lawsuit.

In this case, agreeing to full confidentiality could be a failure to protect public rights by allowing the insurance company to continue using the same underhanded tactics to deny other policyholders their benefits. In effect, systematic wrongful conduct goes unexposed, and thus oftentimes unchanged.

Knowing When to Sign a Non-Disclosure Policy

The key to knowing when a non-disclosure is appropriate in your case is in what type of information is included under the umbrella of confidential information.

Defendants will commonly request the settlement amount be kept private to avoid attracting additional lawsuits. Generally, this is an acceptable condition, and one that can be easily agreed to. However, be wary when a defendant tries to institute a broad framework of what is to be considered confidential information, such as the nature and details of the entire dispute.

Generally speaking, the breadth of confidentiality in a settlement should be clearly laid out, and drawn as narrowly as possible. This compromise protects the rights of both the defendant and the plaintiff.

Obtaining Legal Guidance

Before the issue of confidentiality arises when negotiating a settlement offer, you should already have a legal representative working on your case, or have consulted with an attorney about your claim prior to negotiations.

It is essential to consult with a lawyer about your claim as soon as possible so they can begin compiling evidence to win your case.

Our Tennessee personal injury attorneys are happy to assist you with any questions you may have—from how to file a claim, to negotiating a settlement offer and evaluating confidentiality in your case.

We invite you to browse our knowledge center and blog resources to learn more, or contact us to discuss your individual case today.

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