Confidential personal injury and wrongful death settlements deny valuable information to future victims of corporate negligence. Even worse, confidentiality clauses make it impossible for plaintiff’s attorney to share documents and tactics, which results in many lawyers having to reinvent the wheel instead of quickly achieving positive outcomes for their clients.
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Freight and passenger railroads are particularly likely to demand confidential settlements in big-dollar, high-stakes cases, but companies faced with product liability claims will also insist on confidentiality. Some judges have begun denying approval to routine and overly broad confidentiality clauses in settlement agreements, but more need to do so.
Inserting confidentiality clauses in the long release forms plaintiffs must sign at the conclusion of a negotiation or mediation makes sense for the companies. They get to use the threat of filing a lawsuit to compel the plaintiff repay settlement money when the plaintiff or plaintiff’s attorney discloses specified facts about the case and its resolution.
The information a railroad or the maker of a defective or dangerous product will want kept from the public can include the existent of the settlement itself, the nature and extent of the plaintiff’s injuries, the exact cause of the injuries, the strategies and tactics used by the plaintiff’s attorney, and the amount of the settlement. For instance, the maker of an SUV with a roof that collapses in a high proportion of rollover crashes may insist on nearly total confidentiality in order to protect itself from numerous traumatic brain injury and wrongful death lawsuits.
Plaintiffs can readily and understandably agree to accept confidentiality clauses, figuring that receiving fair compensation and adequate monetary damages now outweighs any restrictions on future discussions of their cases. And since plaintiffs’ attorneys have professional and ethical obligations to respect their clients’ wishes, lawyers cannot order the people they represent to reject confidentiality clauses.
The problem is that confidentiality clauses muzzle plaintiffs and lawyers from sharing what they learned with other people who were injured in similar circumstances. For example, the terms of two confidential railroad injury settlements in Virginia prevent our law firm from posting the case summaries to our website. I also could not report the facts of the cases in state publications like Virginia Lawyers Weekly or in national legal news outlets that other attorneys consult to learn how they can better serve their own clients.
Posting the case results to our website would be especially beneficial, especially since we take cases in Virginia, North Carolina, South Carolina, West Virginia, Kentucky, Tennessee and Washington, DC. Injured railroad workers in several states could find out about possible grounds for their own claims under the Federal Employers Liability Act. Other lawyers could learn about dangerous devices and practices in the railroad industry. We would be happy to take colleagues’ call and advise them on ways to hold negligent employers accountable. Even better, rail corporations themselves might be prompted to improve safety for workers.
However, the confidentiality agreements controlling both settlements stifles any sharing of information with lawyers outside this firm. Some judges—notably, federal judges in South Carolina—will not allow corporations and insurers to insert confidentiality clauses in settlement agreements when the perceived intent of insisting on confidentiality is merely to limit future injury claims. In such cases, the court reasons that as much information as possible should be available to the public and future litigants. Too few courts take that position.
EJL