Victims and Prisoners Act 2024 — changes to Non-disclosure Agreements

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The UK Government has announced its plans for the Victims and Prisoners Act 2024 (the “Act”) which on the 24th of May, received Royal Assent as part of a wash-up before Parliament is dissolved in advance of the general election. The Act includes significant reforms, one of which addresses the use of Non-Disclosure Agreements (“NDAs”). Phillippa Ellis, David Hudson and Toni Lewis report below.

Background (What is the Act?)

The Act follows the UK Ministry of Justice’s (the “MOJ”) announcement on the 28th of March to introduce legislation to ensure victims of criminal behaviour have appropriate access to justice. In its announcement, the MOJ quoted two MPs:

1. Lord Chancellor and Secretary of State for Justice, Alex Chalk:

“We are bringing an end to the murky world of non-disclosure agreements which are too often used to sweep criminality under the carpet and prevent victims from accessing the advice and support they need.” “Our changes will clarify in law once and for all that these gagging orders cannot be legally enforced against victims to prevent justice from being delivered and their voices being heard.”

2. Victims and Safeguarding Minister, Laura Farris MP:

“Sexual harassment is unlawful in the workplace, and it is unacceptable that a few unscrupulous employers have previously sought to construct confidentiality clauses in settlement agreements, that suggest victims cannot report a crime to the police. This has never been the case and today we are making that crystal clear in law.”

The Act was proposed as part of a broader effort to address issues in the criminal justice system related to the treatment of victims and the handling of NDAs in cases involving criminal conduct.

However, the issue has clearly been on the radar for some time. In July 2019, the UK Government announced that it planned to work on legislation which tackled the misuse of NDAs in the workplace.

In October 2019, it further stated that “using these agreements to silence and intimidate victims of harassment and discrimination cannot be tolerated”. Since then, there have been many incidents which have driven the plans for the legislation forward. For example:

  • High profile scandals highlighted how NDAs in the American legal system were used to prevent victims from speaking out or reporting crimes, protecting perpetrators and enabling continued abuse.
  • The #MeToo movement played a crucial role in exposing the widespread use of NDAs to silence victims, galvanizing public opinion to address these issues. It reflects a legal and societal shift towards greater support for victims and a move away from practices that can enable or perpetuate abuse. The movement shed light on how NDAs were used not only in high-profile cases but also in everyday situations across various industries, affecting countless individuals.
  • Increasing public awareness and outrage over cases where victims, particularly of sexual misconduct and abuse, were silenced through NDAs.
  • Government and independent inquiries, such as the Equality and Human Rights Commission’s report on NDAs in sexual harassment cases. These reports recommended legislative changes to prevent the misuse of NDAs and ensure victims could safely report criminal conduct.
  • In February 2024, the Legal Services Board published its report focusing on the role of lawyers’ conduct in the misuse of NDAs.
  • Most recently, the House of Commons’ Treasury Committee published its report, Sexism in the City. The theme of the report looked into the covering up of allegations of abuse (by way of using an NDA) was a “prominent theme” it received about sexual harassment in the financial services sector. It made various recommendations, including a ban on NDAs.

What are the changes?

The Act stipulates that any NDA clauses that prevent victims from disclosing criminal conduct are void and legally unenforceable.

The NDAs affected include those that might otherwise prohibit a victim from reporting the crime:

  • to any person who has law enforcement functions.
  • to a qualified lawyer.
  • to any individual who is entitled to practise a regulated profession, for the purpose of obtaining professional support in relation to relevant conduct.
  • to any individual who provides a service to support victims.
  • to a regulator of a regulated profession for the purpose of co-operating with the regulator in relation to relevant conduct.
  • to a child, parent or partner of the person making the disclosure, for the purpose of obtaining support in relation to relevant conduct.

There might be specific exceptions where certain disclosures are still subject to restrictions, but these are typically limited to protect sensitive information without hindering the victim’s ability to report crimes or seek support.

However, the changes do not apply in circumstances whereby the disclosure by the victim to the relevant person is made simply for the primary purpose of releasing information into the public domain.

Benefits to the changes

The Act is a significant step towards empowering victims of criminal conduct. NDAs have often been used to protect the interests of the perpetrator and institutions rather than the victim. By making such NDA provisions void, the Act helps shift the power balance back to the victims, allowing them to report crimes without fear of legal repercussions.

The fear of breaching an NDA has historically discouraged many victims from coming forward. By removing this barrier, the Act encourages more victims to report crimes, hopefully providing better access to justice and preventing further criminal behaviour by the perpetrator. It also ensures that criminal conduct cannot be as easily concealed through financial settlements and legal agreements.

What are the risks?

As with any new piece of legislation, those who utilise NDAs need to ensure that they are up to speed and complying with the changes:

  • For businesses the Act demands reconsideration of how NDAs are drafted and enforced. Organisations will need to ensure that their agreements comply with the new legal standards, potentially altering how settlements and confidentiality agreements are approached in cases involving allegations of criminal behaviour.
  • For the legal system, Courts may face challenges in interpreting the boundaries of this provision, particularly in complex cases where the definition of “criminal conduct” or the public interest might be disputed.
  • Parties entering into an NDA might attempt to circumvent these rules through alternative means or through crafting NDAs in ways that they believe may still be enforceable, leading to potential legal battles and further clarification being required from the Courts.

Conclusion

The inclusion of provisions to void NDAs that prevent disclosures by victims of criminal conduct in the Victims and Prisoners Act 2024 represents a progressive step towards supporting victims and promoting transparency. It helps to dismantle mechanisms that have historically silenced victims and concealed criminal behaviour.

However, it also poses new challenges for legal interpretations and business practices, necessitating careful navigation to align with the intended spirit of the law. No timeframe has been given for the introduction of the legislation. It is to be introduced “as soon as parliamentary time allows”.

Businesses and parties must be aware of the Act and ensure that any NDA is compliant. If you require any advice on NDAs, please do not hesitate to get in touch.