My client wants me to sign a non-disclosure agreement: should I?
6 February 2020: non-disclosure agreements are becoming more common, but if a client asks you, as a member of ICAEW to sign one, should you? This article outlines some key considerations.
There are often legitimate reasons why your client may wish to enter into non-disclosure (or confidentiality) agreements. They are frequently used to prevent commercially sensitive information being shared inappropriately.
There is no blanket prohibition on members signing non-disclosure agreements, but you should take particular care before doing so and, it may not even be necessary.
Is it necessary?
As a professional accountant, you are already bound by the fundamental principle of confidentiality contained within section 114 of the ICAEW Code of Ethics.
This means that you must respect the confidentiality of information acquired as a result of professional and business relationships and you are unable to disclose such confidential information without proper and specific authority unless there is a legal or professional duty or right to disclose. You would also not be permitted to use such confidential information for your personal advantage or for the advantage of a third party.
Given these restrictions (and the other more detailed provisions set out in section 114 of the Code), signing a non-disclosure agreement may not be necessary.
If a client suggests the use of a non-disclosure agreement, it would be worth reminding them that you’re bound by the Code of Ethics, highlighting the restrictions within which you already operate.
What if the client insists?
If a client nevertheless insists on a non-disclosure agreement, you should consult your firm’s policies and procedures, liaising with the ethics partner/function as appropriate. Some firms adopt a policy of not signing non-disclosure agreements; others have a formal internal review process.
When reviewing a non-disclosure agreement, you should ensure that it does not prevent you from complying with your legal and professional obligations. For example, it would be inappropriate to sign a non-disclosure agreement which could prevent you from complying with your duty to report misconduct or your duty to provide information requested by ICAEW committees (as required by the Disciplinary Bye-laws). Likewise, it would not be acceptable to sign a non-disclosure agreement which could prevent you complying with your legal and ethical disclosure obligations in respect to actual or suspected money laundering or other illegal acts.
If you’re an ICAEW member, affiliate or member of staff in an eligible firm with member firm access, you may discuss your specific situation with the Ethics Advisory Service on +44 (0)1908 248 250.