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Allen & Overy lawyer to face tribunal over Weinstein NDA fiasco

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Regulator confident lawyers’ attitudes to non-disclosure agreements have changed

An individual solicitor at magic circle firm Allen & Overy has been referred to the Solicitors Disciplinary Tribunal (SDT) by the regulator in connection with a non-disclosure agreement (NDA), the regulator’s chief executive revealed today.

During a moment of high drama in an open session of the House of Commons’ Women & Equalities Committee today, its chair, Maria Miller MP, questioned Paul Philip, chief executive at the Solicitors Regulation Authority (SRA), about its investigation of Allen & Overy (A&O) over the use of an NDA when the firm was acting for Harvey Weinstein’s company, Miramax. The NDA formed part of a financial settlement between the company and Zelda Perkins, Weinstein’s former London-based personal assistant.

Miller asked Philip directly when and whether the findings of that investigation would be made public. Philip confirmed that “the solicitor involved has been referred to the SDT”. The SDT must now decide if there is a case to answer.

It all started when an article was published in the Financial Times in 2017 at the height of the Weinstein furore, that revealed how Perkins was asked to sign an NDA following an allegation of sexual harassment made against the movie mogul way back in 1998.

A&O advised Miramax, the US entertainment company co-founded by Weinstein, at the time. Perkins was then represented by Simons Muirhead & Burton. She accepted £125,000 as part of the settlement with Miramax.

The broader issue for the Committee has been the use of NDAs in sexual harassment cases and whether NDAs have, in the past, included punitive clauses which have the potential of limiting what an individual could say about events in the past in any subsequent criminal legal process. The Committee has been scrutinising the legal profession’s role in drafting such clauses.

Miller expressed astonishment that the SRA referral was only made last week despite the fact that the SRA was aware of the existence of the Weinstein NDA as long ago as 2017. In response, Philip said that the investigation had taken “ten months” from the time that the SRA had had sight of the actual NDA itself and that it had “interviewed everyone, and gave people the opportunity to make representations.”

The session also investigated whether or not there is or has been any change in the way lawyers use NDAs since the SRA issued a warning notice on their use in March 2018. Jess Phillips MP queried how effective the notice had been. Philip confirmed said there is a “heightened awareness” of not misusing NDAs. He also confirmed that there have been 13 reports made to the SRA: “We have discussed it widely within the community and we are dealing with a number of reports. There is no doubt that we would not have got that number two years ago.” He continued: “I think law firms are behaving differently” though conceded this was “anecdotal” evidence only.

A spokesperson for A&O said it was unable to “comment on an ongoing investigation”.

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22 Comments

Anonymous

Has the sum paid out under the NDA been returned?

(17)(3)

Anonymous

Did the clause provide for repayment if it was breached? Otherwise, it’s not immediately clear there has been a substantial/total failure of condition/basis (whatever flavour of the cause of action you prefer) given she stayed totally quiet for 17 or so years and only came out about it when the bandwagon was already quickly rolling.

The only likely remedy would be damages for breach, and given his reputation was already sunk at the time they would be nominal as impossible to prove special damage.

(4)(1)

Anonymous

Fair point, but notwithstanding any remedy for breach, I think there are three points:

1) There has been a deliberate and complete failure to follow one side of the contract. Arguably breaking the NDA at the time it was broken maximised the damage done.

2) If the argument that the NDA is invalid is correct then the contract is void and any payment should be returned.

3) Outside of any legal entitlement, there is the question of whether it is morally right to take money in exchange for silence and then break that silence.

(8)(4)

Anonymous

The argument is not that the whole agreement is invalid but that it cannot as a matter of law prevent legitimate disclosures of criminality or other protected disclosures

(4)(0)

Anonymous

NDAs can’t be used to prevent disclosure of criminal behaviour to the authorities. Independent legal advice was taken before the NDA was signed.

The argument is whether i) the NDA purporting to prevent the disclosure of criminal behaviour to the authorities voids the whole NDA (in which case the money should be paid back) or ii) whether there was a breach of a valid NDA (in which case the money should be paid back).

Anonymous

She breached the contract, she should have to return the parties to their original positions, which means 125k back out the pocket.

NDAs are an abhorrent practice to silent people but you don’t just get the benefit of a pay off and deem it fine to then breach the agreement.

(7)(2)

Anonymous

A decent NDA provides for the re-payment of the monies paid in the event of disclosure in contravention of the confidentiality clause. If the signing party has had legal advice prior to signing.or more accurately, they contractual represent that they did get such advice, (so who cares if they didn’t), then the clause is going to stick and be enforceable.

(5)(0)

JDP

Look chap I am glad that you have been studying hard for your contract law exam but you aren’t going to come across a training contract in the LegalCheek comments section.

(23)(1)

Anonymous

LLL

(0)(0)

Anonymous

LLL indeed

Anonymous

Nothing worst than a political prosecution, especially one triggered by an MP who resigned and was forced to issue an apology to the House of Commons due to irregularities with her expenses.

(10)(2)

Anonymous

No deal

cha cha cha

No deal

cha cha cha

Apocalypse NOW!

(1)(12)

Anonymous

It must be so hard growing up as a single child without a father. You poor, insignificant cretin

(1)(0)

Anonymous

Innocent until proven guilty.

Also, next time you watch the wholesome family films with your kids like ‘Paddington’ and ‘The Magic Roundabout’, remember that I helped to make them.

(0)(2)

Anonymous

It’s only a presumption of innocence….

JT

(1)(0)

Anonymous

But certainly not a presumption of guilt…

(3)(0)

Anonymous

Presumption of innocence is no more than a criminal procedural presumption. It has no bearing on any of this.

(0)(1)

Anonymous

Presumption of innocence has every bearing on this. It applies across the board, not just to criminal proceedings. Much as some dislike the idea.

Anonymous

It really does not. I’m so tired of people spouting this sort of bollocks.

Anonymous

It really does. You might be tired of the idea of innocent until proven guilty but that doesn’t mean that it doesn’t apply across the board.

Anonymous

I’m sorry, but why should a solicitor have to face the SDT for something that happened 20 years ago, when attitudes towards NDAs were different (assuming arguendo that they are)?

It smacks of a regulator bowing to political pressure.

(15)(2)

Anonymous

95% of NDAs are signed by those trying it on to get money.

(8)(1)

Comments are closed.

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