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As a general principle, a civil settlement may not, in most circumstances, compromise the reporting or investigation of a criminal matter. That is not to say that such a settlement could not expressly or impliedly purport to do so, but any such agreement will usually be void, and potentially result in charges against all parties for conspiracy to pervert the course of justice.
For instance, the disclosure of sexual assault to police is a breach of the confidentiality provision of the settlement agreement, entitling the employer to pursue a claim for breach of contract. Whether or not such a disclosure is a breach of the settlement agreement would depend upon the wording of the confidentiality clause. If so, there may technically be grounds for a breach of contract action. However, in our view, the same considerations set out in the paragraph above will apply in relation to a confidentiality clause, meaning that there will be significant risks involved in pursuing a claim for breach of contract in these circumstances. Firstly, the clause is likely to be unenforceable to the extent it prevents reporting of a crime to the police, so there seems little possibility of the employer winning the action. Secondly (and more seriously), the action could lead to allegations that the employer has committed a criminal offence under section 5 Criminal Law Act 1967 by including a provision preventing the employee from disclosing a crime to the police and could lead to accusations that the employer is liable for perverting the course of justice.
A breach of contract action will also be risky for the solicitor involved. In 2018, the SRA issued a warning notice related to the use of confidentiality clauses and the exclusions from the duty of confidentiality, which was shortly followed by guidance from the Law Society. The SRA's warning notice reminds practitioners not to use non-disclosure agreements (NDAs) inappropriately, which includes "preventing, or seeking to impede or deter, a person from [...] reporting an offence to a law enforcement agency". Solicitors are under a duty to report a serious breach of the obligations to make appropriate use of NDAs (whether actual or suspected) to the SRA and a failure to do so will have regulatory consequences.
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Partners Employment Lawyers is not a firm of solicitors. Members of Partners Employment Lawyers are consultants at Excello Law Limited and legal services are provided by Excello Law Limited which is authorised and regulated by the Solicitors Regulation Authority under SRA number 652733.
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