Worth the paper?

Following his adventures in the jungle with “I'm a Celebrity” and his decision to write “his story” on the pandemic, Matt Hancock cannot be described as someone who is shy of publicity. The fact that WhatsApp and other private messages about government business have now been leaked to the press are, however, causing him to hit the headlines for reasons outwith his control.

It is therefore even more surprising to realise that far from being the result of a hack, these messages were handed over by him to the writer, Isabel Oakeshott with whom he collaborated on his book “Pandemic Diaries”.

Isabel Oakeshott is a controversial figure and while she has written books in the past collaborating with other politicians, has also been known to make public information which was provided to her in the course of writing them. So was Matt Hancock naïve to pass over the information to her?

It is reported that a non-disclosure or confidentiality agreement was put in place so that information provided by Matt Hancock was to be used solely in connection with the book. Isabel Oakeshott is claiming that she had a duty as a journalist to pass on this information as it was in the “national interest”. Journalistic arguments aside, disclosure being in the “national interest” is not a term usually found in a non-disclosure agreement.

So if a non-disclosure agreement is in place, given suggestions that there will be further information coming out in the press, why is no action being taken to enforce the confidentiality undertakings?

Confidentiality agreements are common in business. In fact, much business could not be carried out without them. But if they are being flaunted in such an open way in this circumstance, does it suggest they are not worth the paper they are printed on?

If a confidentiality agreement is breached or at the risk of being so, the injured party has two options:

• To look for damages for the loss they have suffered; and
• To seek a court order preventing disclosure.

On the point of the damage, the difficulty is to establish that there has been a financial loss.  It can be difficult to assess and requires analysis of sales, profit margins and other financial performance which might be affected. The other potential loss is damage to reputation or goodwill for which damages can be sought – though whether politicians could ever argue that their reputation has been affected is hard to say!

The difficulty in assessing and valuing the loss is therefore an important factor limiting the value of actually taking proceedings where a non-disclosure agreement is breached. So what about a court order? Once the genie is out of the bottle it can't be put back in, so a court order can only be used where there is a threat of disclosure so that it is obtained before the disclosure takes place. 

It does, however, mean there has to be a public declaration that a court order is being sought or has been obtained. That, in itself, may be a deterrent – and certainly, there would be little value in Mr Hancock seeking that remedy now. Further, while the obligations of confidentiality are in the agreement with Isabel Oakeshott, they do not extend to anyone who receives the information from her and so any further order against third parties would have to be based on an invasion of privacy or other ground for which there would be a very high hurdle to overcome.

The true strength of a non-disclosure agreement is the risk to the reputation of the person breaching it. If it is known that they have signed up to a non-disclosure agreement and then breached it, there would be few who would be willing to do business with them in the future. It, therefore, makes it all the more surprising that Matt Hancock chose to work with Isabel Oakeshott when she has been known to disclose information in similar circumstances before.

So are non-disclosure agreements worth putting in place? Politicians and journalists apart, most business people do wish to ensure that their reputation remains intact. It becoming public knowledge that they had ignored an undertaking to keep information confidential would be of immense harm to them and their business. It is not, therefore, the legal remedies which give non-disclosure agreements their value, but the risk to reputation of being known to breach them. For that reason alone, they remain a valuable and worthwhile step to take to protect your business.