Confidentiality agreements in litigation are often desired by law firms, defendants or insurance companies in cases being handled by Plaintiff's attorneys for a variety of reasons. These agreements are typically agreements that require the Plaintiffs and his/her attorneys to refrain from discussing the results of a case and forbidding the attorney or client from publishing the results of a case in a newspaper or legal publication. There are normally penalties for violating the agreement that can be very harsh to the Plaintiff including having to refund the settlement or payment of the Defendant's attorney's fees to enforce a confidentiality agreement.
These agreements are sometimes used to save a party embarrassment by requiring the Plaintiff and the Plaintiff's attorney to keep silent about the Defendant's payment of substantial funds to settle a case, or to prevent the appearance of Defendant's fault in the case, due to settlement of a case, or simply to keep the information private so that others researching similar cases, don't know of the outcome of a particular case. Defense firms sometimes don't want their names associated with a large payout because this can potentially affect their reputations by being viewed as someone that pays out large amounts on cases. Many insurance companies, defense firms or Defendants want to settle a case in order to reduce the risk of loss at trial, or to reduce their litigation costs or to prevent some type of precedent that may change the way cases are handled in the future. Over the past 23 years, quite a few of the cases that I have worked on have resulted in settlements that are subject to a confidentiality agreement. This makes it difficult to deter negative behavior of Defendants and Insurance Companies and it makes it difficult for others to research the value of similar cases, when the case results can't be published.
Many trial attorneys value the publication of results of cases that show a large recovery, or a great outcome on a difficult case. Good results on cases raise their reputation among peers and Judges. Some attorneys read Lawyer's Weekly, Verdict and Settlement Reporters and see the outcomes of cases and want to refer more cases to the attorneys of such cases. Publication of the results of successful cases can also help deter the conduct of the Defendant or to "punish the Defendant" by letting others know that the Defendant acted inappropriately and had to pay for his/her conduct. This can help reduce future negligence of a particular Defendant or change his/her behavior, if other attorneys know that a particular Defendant or insurance company had to pay a lot on a case. This is because when a significant verdict or settlement is reported this can lead to more litigation resulting in the risk of more judgments or claims against the Defendant with more money being needed to defend the cases. Risk Managers of companies can change the behavior of Defendants and their insureds to lessen their potential exposure in such cases. By signing confidentiality agreements, the goal of deterrence or changing a Defendant's behavior is not always accomplished.
A lawyer is required under the Missouri Rules of Ethics to "abide by a client's decisions concerning the objectives of representation...and consult with the client as to the means by which they are to be pursued. A lawyer shall abide by a client's decision whether to accept an offer of settlement of a matter." Rule 1.2 (a) Scope of Representation. Therefore, if an offer of settlement is obtained in mediation, or through negotiation of the case, but it is conditioned upon the execution of a Confidentiality Agreement, and if the client wishes to accept such an offer, the Lawyer must abide by the client's decisions.
I have not always been able to publish the results of certain cases that I have handled over the years for my clients. I have been involved in cases ranging from cases against major hospitals for negligence causing death and in cases against trucking companies and insurance companies for serious injuries. I have handled numerous cases against Life Insurance Carriers and Long-Term Disability Carriers for payment of death and disability benefits which are confidential. I have handled several cases against nursing homes that are confidential. I, along with other attorneys in my firm have consistently handled cases against providers of health insurance and disablity insurance that end up in Federal Court under ERISA, that result in favorable outcomes for my clients. Many of these are subject to confidentiality agreements. Sometimes I question whether the cases should be settled if they are subject to a confidentiality agreement because attorneys, Judges and insurance companies won't know the outcome of the cases, and the results can not be used to deter behavior or to value similar cases in a particular venue.
However, when the case is over and there is a successful resolution by a settlement that the client approves of, or by a Plaintiff's verdict, I believe that I have done my job to represent my client to the best of my ability by obtaining a favorable outcome of the case for my client. When the results are subject to a confidential agreement, it is incumbent upon me as an attorney to follow Ethical Rule 1.2 (a) which requires me to abide by my client's wishes concerning a settlement. The secondary goal of deterring behavior of similar Defendants may not be met due to being unable to publish the results of the case, but the client's best interest comes first. I am hopeful that if I continue to fight for clients and obtain good results, even if the results are confidential, the companies may get the message that they need to change their conduct.
Author: Phil Tatlow
