Over recent years NDAs have generated great controversy because of their misuse by the wicked, alas often aided by unprincipled lawyers, to cover up wrongdoing which should properly enter the public domain. This difficult issue arises again concerning the alleged abuse by Mohammed Al Fayed of female Harrods staff - amongst others - which appears to have both gone on for years, and which has been kept secret by means of (inter alia) NDAs.

I have encountered this in my own practice, representing victims of the Lloyds Banking Group fraud. For years LBG sought to cover up the wrongdoing in its Reading branch by the use (inter alia) of NDA’s. Its lawyers were complicit in this, to their shame. Fortunately, much of the wickedness at issue has now reached the public domain, and hopefully more will emerge when a report by a KC into the whole matter is published.

But NDAs are themselves neutral. They have many entirely legitimate aims and have been a feature of the law for centuries. We should resist the temptation to think that every NDA is now a legal means where wrongdoing of many types are kept from view. Most of the time they are not.

The starting point for any consideration as to the legality/morality of NDAs must start with the legal and moral principles around the duty of confidentiality. This is an essential right for all of us; individuals and companies alike. It must therefore enjoy legal protection.

The duty of confidentiality also exists independently of the law of contract. The law imposes a duty of confidentiality in certain circumstances by the mere existence of certain relationships, such as between a professional (such as a doctor or lawyer) and a patient/client. Again, such duties are essential.

Non-disclosure agreements are where one party contractually makes them subject to a duty of confidentiality, and again this is in principle an entirely appropriate obligation for one party to seek to impose on another. The time when they become most controversial is when they are entered into by employees/ex-employees by means of a contract with their employer/ex-employer, and it subsequently emerges that the employer’s cupboard is replete with skeletons and NDAs are them deployed to keep them there.

There is however certain information which an employee will glean from an employer which again is entirely appropriately the subject of a duty of confidence. The law (without a contract) protects only what are known as “trade secrets”, so a wider extent of protection is entirely reasonably sought by an employer of an employee when their tenure in the post comes to an end.

A properly drafted NDA should however carve out certain circumstances when confidential information can be disclosed; such as to a regulator, to the authorities, to appropriate professionals (such as lawyers). The law also rightly gives a certain amount of protection to bona fide whistleblowers – there being alas many who claim to whistleblowers who are in fact no more than disgruntled employees seeking revenge on an employer which has justly sacked them.

The problem normally arises where NDAs are used as a legal device to prevent wrongdoing on the part of the employer company, or individuals within that company entering into the public domain. There have undoubtedly been many occasions where clients and their lawyers have misused NDAs for this purpose. There is however no simple solution to this.

There are frequently instances where employees are properly dismissed for some form of wrongdoing, and who then wish to exact revenge on those employing them by making false allegations against them via the social media, online in various places (such as the Glass Door website), and the use of an NDA to curtail such activity is entirely appropriate. The difficulty, which is effectively impossible to regulate, is to determine when a true or false allegation is being made. Sometimes that can only be determined after a full examination of the facts by a judge.

Jonathan is the principal at Coad Law.