You've reached a compromise, avoided the public arena of a trial and the potentially unwanted publicity that can go with it, and are happy with the terms of settlement negotiated. You are about to lodge an order at court confirming the claim is settled. But have you thought about how you are going to keep the terms of the settlement confidential should you need to?
Our experts provide a reminder of the issues that need to be considered in order to maintain confidentiality.
Why do you need to think about this?
Since 2 October 2006, Part 5.4C of the Civil Procedure Rules (CPR) has enabled non-parties to proceedings to request copies of statements of case, orders and other documents filed by a party on the court record. Copies can be provided without the knowledge, or consent, of the parties to the litigation.
How can you maintain confidentiality?
Confidentiality clauses can, and should, be included in settlement agreements where the terms of the settlement are particularly sensitive. Remember, such clauses cannot be included in the body of a court order. To get round this, Tomlin orders are generally used to bring the court proceedings to an end. The body of the order should be drafted so as to stay all further proceedings except for the purposes of enforcing the agreed terms but should also provide for what is to happen to the costs of the proceedings. The agreed terms of settlement, including the confidentiality provision, should not be set out in the body of the order but either:
- in a schedule at the end of the order
- in a settlement agreement annexed to the order
- in a separate document which is clearly identified but not annexed to, or kept with, the order.
How does this work?
By using any of the above options the terms of settlement do not form part of the court order as such. However, by adopting option one, the schedule forms part of the court record and there is the risk that it might be inadvertently disclosed to non-parties to the proceedings pursuant to Part 5.4C CPR.
There is also a risk that an annexed agreement could also be made available in the same way, although any annexure should be placed in a sealed envelope and marked "not to be disclosed to non-parties without a court order".
To further avoid the possibility of disclosure if either of these options is used, parties can also apply for an order that specific orders or documents on the court file must not be made available to non-parties. Although this should work, be aware that this may still not achieve a total guarantee against inadvertent release.
A quicker, cheaper and more certain way of maintaining confidentiality is to use option three. The Tomlin order should refer to the settlement agreement in such terms as to ensure that it is clearly identifiable should there ever be a dispute as to its terms. The parties' names and the date of the agreement should be referred to in the schedule, as should the location of the agreement. It is usual for one of the parties' solicitors to keep the original, signed agreement with the other party's solicitors keeping a copy.
