Settlement Agreements, NDAs and the Victims and Prisoners Act 2024: what businesses need to know. 

In this blog, employment solicitor Nick Hall discusses the Victims and Prisoners Act and its importance in relation to NDAs and Settlement Agreements.

In anticipation of the General Election, on 30 May 2024, Parliament was dissolved.  

Before that happened, a process termed somewhat pleasingly as a “wash-up” took place. 

In essence, that process accelerated various proposed laws in the form of Parliamentary Bills which would otherwise fall away as a result of Parliament being dissolved. 

Victims and Prisoners Act 2024 (“the Act”) 

One of those proposed laws was the Victims and Prisoners Bill, which as a result of the wash-up became an Act of Parliament on 24 May 2024.  

The Victims and Prisoners Act is not yet in force, i.e. is not yet law, but it is anticipated that it will become law not long after the election takes place. 

What will the Act do? 

The origin of certain provisions of the Act stems from public opinion that victims of crime, including those who are victims of sexual assault, should not be legally bound into Non-Disclosure Agreements (commonly known as “NDAs”).  

In very general terms, NDAs are confidentiality agreements under which the individual is forbidden from disclosing information to others (in this example, information about an assault they have been a victim of). 

The function of part of the Act, however, will be to make any clause in any contract which seeks to prevent a disclosure by the victim to specific people legally unenforceable. These people include: 

• Any person with law enforcement functions, for the purpose of those functions being exercised in relation to relevant conduct – for example, to a police officer. 
• A qualified lawyer, for the purpose of seeking legal advice about relevant conduct – for example, to a solicitor or barrister. 
• Any individual who is entitled to practise a regulated profession, for the purpose of obtaining professional support from that service in relation to relevant conduct. An example is a therapist. 
• A regulator of a regulated profession for the purpose of co-operating with the regulator in relation to relevant conduct. 
• A person who is authorised to receive information on behalf of any of the above persons for the purposes mentioned above.
• A child, parent or partner of the person making the disclosure, for the purposes of obtaining support in relation to the relevant conduct. 

Note however that it will not be an unenforceable clause if the disclosure by the victim to the relevant person is made simply for the primary purpose of releasing information into the public domain. 

The importance of the Act in relation to Settlement Agreements for business and individuals 

In the UK, NDAs between an employer and its employees where the document is purely a confidentiality agreement are fairly rare. 

However, Settlement Agreements, i.e., “full and final settlement” agreements between an employer and an employee who is (usually) about to become an ex-employee, are very common. Such a document sets out, for example, payments to be made to the employee as well as other standard clauses, including that the employee will not sue the employer. 

The vast majority of Settlement Agreements also contain confidentiality clauses – NDAs – regarding the employee’s termination of their employment and, for example, the circumstances surrounding its termination.   

Where the termination and surrounding circumstances relate, for example, to sexual assault, those details form part of the NDA. 

That said, many Settlement Agreements contain exclusions from this obligation of confidentiality, such as the ability to report a crime to the police. 

However, the Act goes further than the current, more common, exclusions within Settlement Agreements. 

What should employers do about the Victims and Prisoners Act 2024?  

Employers who use Settlement Agreements will need to ensure that the document they use contains an up-to-date list of exclusions which reflect the Act. 

If they do not do so, the result could be that the confidentiality provisions in the Settlement Agreement are not legally enforceable against their employee. 

As mentioned above, the Act is not yet in force and will not be until some time after the result of the election is known. However, bearing in mind the subject matter and public opinion on this area, it is reasonable to assume that it will become law pretty soon after the election. 

If you want any more information on this, please contact Nick Hall, Consultant Employment Solicitor at Setfords, at nhall@setfords.co.uk