Background Note | HBS Case Collection | January 2004 (Revised September 2004)

Confidentiality in Settlement Negotiations: Ethics & Law

by Michael A. Wheeler, Dana Nelson and Gillian Morris

Abstract

Legal policy has a long history of protecting confidentiality of negotiations that are designed to produce settlement. However, within the past several decades there has been a significant push toward openness. Compelling arguments support confidentiality: It helps promote candid discussion when sensitive material is involved and may make settlements possible. On the other hand, ethical concern where public health and safety are involved has prompted some states to pass laws requiring the disclosure of settlement agreements or to revise their procedures governing confidentiality of discovery, protective orders, and sealing of litigation records. This case summarizes the legal and ethical debate. It identifies the major issues surrounding confidentiality in settlement negotiations and illustrates them with several examples.

Keywords: Ethics; Lawsuits and Litigation; Attorney and Client Relationships; Policy; Corporate Disclosure; Negotiation;

Citation:

Wheeler, Michael A., Dana Nelson, and Gillian Morris. "Confidentiality in Settlement Negotiations: Ethics & Law." Harvard Business School Background Note 904-057, January 2004. (Revised September 2004.)