Settlement NDA that would stop a claimant reporting an assault to the police (NDA warning notice)
A firm acts for a gym operator defending a negligence claim by a member, Ms Tasha Greene, who was injured when a weights machine collapsed. Ms Greene also alleges that a member of staff assaulted her during the incident. The parties have agreed a settlement, and both are legally represented. The client wants the settlement agreement to include a clause that Ms Greene will not disclose the circumstances of the incident to anyone, 'including the police or any regulator', on pain of repaying the settlement sum.
Which of the following best describes whether the firm may include the clause?
Choose one answer to see the reasoning.
Worked answer
Correct answer C: No, because an NDA must not be used, directly or through a claw-back, to stop or deter a person from reporting an offence to the police or to a regulator.
THE RULE TO REMEMBER
An NDA must not be used, including through claw-back clauses, to prevent or deter anyone from reporting an offence to the police or making reports to a regulator, even where all parties are represented.
Settlement NDA that would stop a claimant reporting an assault to the police (NDA warning notice)
The SRA's warning notice on non-disclosure agreements confirms that NDAs are not prohibited. However, it treats an NDA as improperly used if it is used to prevent, impede or deter a person from cooperating with a criminal investigation, reporting an offence to a law enforcement agency, or reporting to a regulator, among other protected disclosures. Claw-back clauses must not be used in a way designed to, or having the effect of, improperly inhibiting such reporting. The notice applies whatever the context of the NDA, including negligence disputes, and even where every party is legally represented. A clause barring Ms Greene from telling the police about an alleged assault, backed by a duty to repay the settlement, is squarely within the SRA's concern. In addition, since 1 October 2025, s.17 of the Victims and Prisoners Act 2024 has made a provision in an agreement void so far as it purports to prevent a victim (or a person who reasonably believes they are one) disclosing information to the police or others with law enforcement functions about the relevant conduct. (A replacement version of s.17, substituted by s.6 of the Victims and Courts Act 2026, has not yet been brought into force.) Drafting it would risk breaching Principles 1, 2 and 5 and para 7.5 of the Code. The firm should advise the client accordingly and may include only a confidentiality clause that expressly preserves permitted disclosures. If the client insists on the improper clause, the firm must consider whether it can continue to act.
Why A is wrong: The SRA warning notice applies even if all parties to the NDA are legally represented.
Why B is wrong: Independent advice does not make it proper to use an NDA to stop a person reporting an offence or reporting to a regulator.
Why D is wrong: The warning notice applies to NDAs in any context, including negligence claims and commercial transactions.
Why E is wrong: The SRA does not prohibit NDAs; it prohibits their improper use, so a properly drafted confidentiality clause could be included.
A little more practice done.
Related questions
Right-to-reply letter threatening a journalist with remedies unavailable in a civil claim (SLAPPs)
Which of the following best describes how the firm should respond to these instructions?
Undertaking to pay an expert's fee when the client has not put the firm in funds (Code 1.3)
Which of the following best describes Gareth's position under the SRA Code of Conduct for Solicitors?
Letter to unrepresented debtor discouraging legal advice and imposing a 24-hour deadline (Code 1.2)
Which of the following best describes the firm's position?
A GOOD HABIT, DELIVERED
Tomorrow's question.
In your inbox.
One free question a day, with the answer and reasoning.
No course pitches. Just your daily practice.