Professional advisers
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NDA Anatomy™
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External lawyers, auditors, accountants — those owing their clients fiduciary duties, confidences and (for lawyers at any rate) offering them the somewhat holey cloak of legal professional privilege, such that one’s usual paranoia about the disclosure of proprietary data, trade secrets and intellectual property can be safely set aside. You can tell your professional advisers your innermost thoughts — and your client’s — without a great risk that the cat contained therein will be let out of the bag.
Go on, hit me
But let’s just say kitty did get out, and it was on your law firm’s watch. Now, if you were minded to goad your client into a pointless argument — and it is a special kind of legal eagle who can resist a cheeky troll every now and then — this “professional advisers” rider is your ticket to the races. All you need to do is quibble openly about whether you should be responsible if your professional advisers breach the agreement.
STOP, STOP, STOP — I can see you all raising your hands to complain. “But, JC, we can’t possibly be held responsible for the nefarious acts of a third party! It’s an outrage!”
Quite so, my little starlings, quite so. But let’s step through this.
FIRST, “our professional advisers” is legal eagle speak for “our lawyers” — and, if you’re on a seriously monster deal, your tax accountants. Confidentiality is the basic U.S.P. of any commercial law firm. It is what, before anything else, they’re good at. That’s why legal professional privilege is a thing. “But, JC, just because they should be discreet doesn’t mean they will be — ”
Hush, my petal. Also, quite so. But bear with me.
SECOND: The NDA’s dirty secret is that very rarely are any damages suffered, let alone provably attributed to a breach of contract even when it is breached. This is why it most of them make such a big thing about the prospect of equitable relief — injunctions and so on. Compensatory damages are likely to be “an inadequate remedy” because in many cases there won’t be any. “But, JC, that’s another factual assumption and you know we legal eagles aren’t allowed to pay any attention to those. We deal in legal possibility — ”
Hush, my petal: This, too, is quite so. But I haven’t finished.
THIRD: If a professional adviser does breach confidence and does cause your client material damage you can, in the vernacular, sue its expensively upholstered arse off. Not only do commercial law firms boast some of the deepest pockets in Christendom, but they are obliged to hold professional indemnity insurance for occasions just such as this. Much that colossal legal bill — the part of it that doesn’t go to upholstering your learned friend’s arse in finest cloth Saville Row can produce — goes to meeting the insurance premia, so goes to covering that expensive arse in another way. So, get your money’s worth!