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Settlement confidentiality: necessary evil or positive?


By Elizabeth Grace

In the past several years, confidentiality clauses in settlement agreements, or what are sometimes called “gag orders”, have been the subject of well-deserved scrutiny in sexual abuse cases resolved by way of out-of-court settlement.

While there is no question there have been excesses that need to be guarded against by vigilant plaintiffs’ lawyers and avoided by enlightened defence lawyers, my view is that carefully drafted confidentiality clauses generally serve the interests of all parties involved in litigation based on sexual assault. Certainly, confidentiality clauses are an accepted part of a settlement package in our civil justice system and every indication is that they are here to stay.

When an out-of-court settlement is reached, it is a legally binding contractual agreement in which all parties to the agreement are entitled to expect some benefit to flow to them.

Plaintiffs expect to receive compensation for the injuries and harms they have suffered, and to avoid a continuing legal process. In short, they want closure.

Defendants are also entitled to derive some benefits from a settlement. In exchange for making a payment to resolve a claim, they too want closure. They usually also want to avoid publicity around the fact they have made a payment for fear this could trigger others to come forward.

In my experience, carefully drafted confidentiality clauses that are not unduly broad are a necessary part of our civil justice system’s response to sexual abuse. As lawyers, we should strive to make sure these clauses are reasonable in their scope and purpose and understood by our clients.

If this topic interests you, please see my more in-depth discussion of the issues involved with confidentiality clauses in sexual abuse cases

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