Confidentiality is a question of confidence

For Smita Jamdar, if universities had confidence that they were doing the right thing by students with a grievance, they would never reach for a confidentiality clause.

From reports it appears that around one third of universities use confidentiality clauses in student disputes and complaints – over issues ranging from allegations of assault, or about safeguarding at risk students, to complaints about service provision more generally.

The use of such clauses is not new, nor is disquiet about their use. However, the legal, social and political “mood music” around their use has changed significantly over recent years and this may provide a useful moment for institutions to reflect on what the future holds for such agreements.

How do confidentiality clauses work?

For clarity, a confidentiality clause is one which requires the parties to an agreement not to reveal something to third parties.

That might be a very broad obligation (i.e. not to reveal the fact, the terms or the underlying circumstances of a settlement) or relatively narrow, for example just the settlement amount. Failure to observe this obligation gives the other party the right to take action, either as specified in the agreement (one report indicated that a student had been told she would be expelled if she broke confidentiality) or for breach of contract.

Confidentiality clauses need to be distinguished from the wider duty of confidentiality that pervades many of a university’s interactions with its students. In discipline cases, for example, there is a justified expectation that all those involved will treat the process as confidential and not, say, share witness statements or documents supplied as part of that process with the wider world. If this were not the case, there would be an understandable reluctance to participate in these processes.

There are a number of issues relating to the use of confidentiality agreements, which institutions need to think about in deciding whether to continue to use them.

Confidentiality and consumer rights

The first is that there are questions over enforceability, in other words how confident can institutions be that they will be able to rely on such agreements. There has always been a doubt over what remedy an institution would be seeking if it sued a student for breach of confidence. It may not be possible to demonstrate any tangible loss, and an injunction is unlikely to achieve much if the details are already out there, not to mention that taking further action may simply increase the amount of publicity about something that the institution evidently wanted to keep quiet.

More specifically, there is at least an argument the Consumer Rights Act 2015 renders the use of such clauses in settlement agreements with students unfair, especially where they impose broad obligations of non-disclosure to a very broadly defined audience, rather than, say, just the settlement amount.

The Act extends the principles of unfairness to secondary contracts and to terms that have been specifically negotiated, rather than just standard terms. A secondary contract is one which reduces the rights and remedies available to or increases the obligations imposed on a consumer under the main contract. Could a duty of confidentiality where none existed previously constitute an increase in the consumer’s obligations? There is on the face of it a clear problem with running a case that such a clause is an unfair term and therefore unenforceable: the Act expressly excludes settlement agreements from the definition of secondary contract but only if they represent the “settlement of a claim under the main contract”.

It therefore appears that settlement of claims for discrimination and negligence, or even settlements of complaints that are not articulated as a breach of contract, but which clearly affect student’s rights to sue under or speak about the main contract might therefore amount to secondary contracts under the Act. That settling a claim is an onerous and significant decision appears beyond question; in employment cases, for example, the law requires employees to take legal advice before signing up to a compromise agreement. When dealing with consumers, therefore, the potential for unfairness is self-evident.

Reputation

The second issue for institutions to consider is how effective these agreements are anyway. There have been many instances recently where individuals who signed up to confidentiality clauses have nonetheless spoken out and so the deterrent effect of such clauses may be diminishing.

More broadly, institutions have often used these provisions to protect their reputations. There is of course absolutely nothing wrong with caring about reputation, but as the recent reports show, the potential for easy, mass communication through social media makes reputation management much less about successfully choreographing the news and more about being able to respond to threats to reputation positively and constructively, demonstrating that the institution is interested in doing the right thing for the right reasons, even if it may not have quite got that right in any given case.

Looked at this way, the use of confidentiality agreements gives little confidence either that the news won’t get out or that they will do anything for the institution’s reputation if it does.

A relic?

The third issue that institutions need to think about in deciding to use these agreements is the extent to which they are now out of step with wider sector practice and public expectations. The OIA has long made it clear that they do not approve of the use of such clauses in settling student complaints. The current OfS consultation on harassment and sexual misconduct demonstrates that the OfS regards unsupportive approaches to student complaints and claims as potential breaches of registration conditions relating to quality and consumer protection. Government has made it clear that it is willing to legislate to prevent the use of such clauses. UUK has joined in criticising the practice.

Against the backdrop of wider social justice movements, such as #metoo, to assert and protect individual’s rights against “institutional” abuse of power, these agreements can be seen as oppressive and uncaring. Stories like those that were reported last week do nothing to engender wider public confidence in the sector at a time when the need for public support for and indeed defence of our universities could not be greater.

For all these reasons, the use of confidentiality clauses really could become a question of confidence: in our universities and their ability to handle student complaints fairly and transparently, to be able confidently to defend what they have done and the decisions they have reached and to show leadership in being able to learn from things that have gone wrong. There is a real risk that continuing to use them could produce the wrong answer to this important question.

Join us at The Secret Life of Students in March where we’ll interrogate the state of the student experience in more detail. Booking open now.

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