The Solicitors Regulation Authority (“SRA”) has updated its Warning Notice on the use of non-disclosure agreements (“NDAs”).

The Warning Notice was first published in 2018 following high profile stories of the apparent improper use of NDAs and evidence heard by the Woman & Equalities Committee which suggested that NDAs had included clauses that appeared to interfere with the ability to report alleged crimes to the police. It was subsequently updated in 2020, after which the SRA conducted a thematic review into the use of NDAs.

The latest update reflects the findings of the thematic review. Whilst the SRA found that most NDAs complied with its requirements and were used legitimately to, for example, protect commercial interests, reputations and confidentiality, the review identified some “common shortcomings” that the Warning Notice seeks to address.

In particular, the SRA warns that NDAs should not be use routinely and that “from the outset firms and clients should consider carefully if an NDA is necessary given the specific circumstances of the case”. Furthermore, the Warning Notice states that firms should ensure that all those dealing with NDAs have adequate support and training on the matters covered in the Warning Notice.

As for the contents of NDAs themselves, the SRA cautions those involved in the drafting of them not to be overly reliant on precedents or templates: each NDA should be “specifically tailored to the individual circumstances of each case”. Care should also be taken not to include “unreasonable time limits” and the SRA states that “whether you are acting for an employee or employer, you could always consider ‘pushing back’ on unreasonable time limits. Any time limits should always allow you sufficient time to properly take instructions, advise and respond”.

Finally, the updated Warning Notice advises that “clear advice should always be given to the client about what the NDA does and does not permit them to do” and that any potentially unethical or unenforceable clause in an agreement with an NDA should be raised with the other side, whilst any serious concerns should be reported to the SRA.

The updated Warning Notice can be read in full here.