How can you keep your confidential information confidential?

25 Feb How can you keep your confidential information confidential?

Last month we looked at how business owners protect themselves in respect of non-payment of fees. This monthwe are looking at protecting your confidential information.

The protection offered by the general law of confidence is not always clear so many business owners govern this in the form of a confidentiality agreement, also known as a non-disclosure agreement or NDA.

The English courts will enforce obligations of confidentiality where one party imposes those obligations on another by contract. However, there are exceptions to this rule, including statutory obligations, the requirements of public bodies, orders of the court, and information that is in the public domain.

It is all very well placing obligations on a party of what they can do with confidential information, but rst it is important for both parties to understand what is confidential information. The de nition of confidential information should be set out clearly in the NDA. Generally, the person or company disclosing the information (known as the discloser) will want the person or company that receives the information (known as the recipient) to hold the information in strict con dence and not disclose it to any other person without consent. It is also usual for the recipient to only be allowed to use the information for a specific purpose.

How long does a NDA remain in force? Well this depends on how long you want it to last. There is no maximum time limit for which a NDA will remain in force. You could keep it in force until the confidential information becomes public if you like. It is usual to not have a time limit stipulated within a NDA but with more and more contractors working under NDA’s it has become a common request from recipients to insert a time limit so that they know when their obligations under the NDA will come to an end.

When adding a time limit into a NDA the discloser needs to ensure it is not too short otherwise the discloser will have to rely on the common law of confidence, which is likely to offer less protection than a NDA.

It is common for the discloser to require the recipient to destroy or return documents that contain confidential information. By having this requirement it will allow the discloser to continue to have control of all documents containing the confidential information. There are some statutory obligations that place restrictions on the ways in which individuals and companies deal with certain types of information.

These obligations will apply regardless of whether a NDA is in existence. These include the Data Protection Act, The Proceeds of Crime Act, and The Employment Rights Act.

Here are some points to think about when considering a NDA:

• What exactly is the confidential information?

• What duties do you want to place on the recipient?

• What is not confidential information?

• Do you want a time limit for how long the NDA will last?

• Should the recipient return or destroy the confidential information?

If you require assistance with con dentiality agreements, either to draft or review, then
please contact us.

(This article should not be treated or relied upon as legal advice and you should seek legal assistance for your own individual circumstances)