The latest developments have highlighted the risk of hiring an external consultant to work on a project without an enforceable confidentiality agreement. Increasingly, consultants are using the work experience of industrial clients as a springboard to later sell this expertise in prosecuting these clients and others in the sector. As a contractor, you will be well served if you have strict confidentiality agreements to prevent a sensitive information advisor from returning years later and using the same information against you in future legal action. Finally, it is generally advisable to also include a “conflict of interest” provision to prevent an advisor from using his work product against that client in any way, in any forum, without the lawyer`s prior consent, and to reserve the last word, or your advice, if there is a potential conflict or conflict. The need for strict confidentiality agreements was highlighted in environmental product liability disputes, which culminated last week with a $236 million ruling against ExxonMobil. One of the applicant`s main witnesses was an expert who previously worked as an advisor to a defendant on projects directly relevant to the litigation issues and exposed to the confidential information provided by the defendant. The defendant did not require the advisor to enter into a confidentiality agreement during the project. The accused moved to prevent the complainant from using the expert against them in the complaint, but the court dismissed the defendant`s request, largely because of the lack of a confidentiality agreement with the counselor. If the defendant had really been interested in keeping the information confidential, the court stated that it would have expressed in writing to the counsel its expectations by inserting a confidentiality clause into the consultation agreement. When developing a confidentiality agreement, there is often a tension between the client`s desire to keep confidential information confidential and an advisor`s possible obligation to disclose the information to state regulators. Reporting obligations imposed by federal, regional and local laws may limit a client`s ability to obtain full protection against disclosures by an advisor. In the environmental context, z.B. when contamination of hazardous substances is detected as part of the transactional diligence, anyone who has “controlled” the release facility is required to report it to the EPA if the extent of the contamination exceeds the quantities to be reported.
In some states, such as New Jersey, “anyone who has discovered a rejection from an underground store is required to report it to public authorities. Under these conditions, even the best written confidentiality agreement does not protect the information discovered by a consultant from disclosure. An appropriate confidentiality clause should take into account the consultant`s need to comply with mandatory reporting obligations, while preserving a company`s desire to maximize confidentiality and retain control over any communications with regulators that may be necessary. The clause should also require that all communications with the government be authorized by the client`s advisor or advisor. The reservation should contain a language that states that, if the advisor believes that he or she must contact a government authority without delay before obtaining such consent, it provides the client or advisor with an appropriate opportunity to make such a notification and, in any event, requires the advisor to immediately inform the client of such communications.