Tennessee Board of Professional Responsibility Places Restrictions on Settlements which Include Secrecy Agreements

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The Tennessee Board issued an Ethics Opinion which advises that:

“It is improper for an attorney to propose or accept a provision in a settlement agreement that requires the attorney to be bound by a confidentiality clause that prohibits a lawyer from future use of information learned during the representation or disclosure of information that is publicly available or that would be available through discovery in other cases as part of the settlement, if that action will restrict the attorney’s representation of other clients.”

More specifically:

“If an attorney is bound by a confidentiality clause that prohibits him or her from discussing any facet of the settlement agreement with any other person or entity, regardless of the circumstances; and which prohibits the attorney from referencing the incident central to the plaintiff’s case, the year, the make, and model of the subject vehicle of the identity of the Defendants, defense counsel would accomplish indirectly what they cannot accomplish directly by precluding the attorney from representing plaintiffs with similar claims.

“There is also a public policy consideration. A confidentiality agreement in long-running personal injury litigation does not create a ‘compelling interest’ that overcomes the strong presumption in favor of public access to the data. The availability for plaintiffs’ firms to act as industry watchdogs is both good public policy and was specifically addressed as a vested responsibility during Congress’s enactment of the Federal Motor Vehicle Safety Standards.”

At the same time, there is no ethical prohibition against “the most common confidentiality provisions, which prohibit disclosure of the terms of a specific settlement, including the amount of the payment.”

Tennessee Formal Ethics Opinion No. 2018-F-166 (June 8, 2018).

 

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