Where confidentiality is required, defendants routinely require that the settlement amount or conditions be kept confidential. However, some defendants require confidentiality to include the nature and details of the dispute. Since judicial entries are rarely confidential, it is unlikely that such a broad language will be applicable. In general, the conditions of confidentiality should be as strict as possible. It is not uncommon for the defence to attempt to include in the agreement a compensation clause that can be liquidated, often for the full amount paid for the settlement of the case. The applicant should never accept such a delay. It is very likely that the IRS will consider the amount of liquidated damages as irrefutable evidence of the value of confidentiality and ultimate proof of the amount of taxable income in the colony. Similarly, the danger to which the applicant is exposed in the event of unintentional disclosure of the terms of the transaction is equally threatening. This threat can effectively continue the adversarial relationship between the settler parties. For a variety of reasons, a customer may prefer confidential billing. For example, defendants may wish for confidential regulation so as not to create additional claims or damage their reputation because of the collection of debt that could be accompanied by a transaction.
The general view is that, in most cases, complainants do not seek a confidential transaction, but complainants may accept a confidentiality provision because they want to resolve the matter or because they do not want the details of the transaction (such as their alleged damage or the amount of money they received) to be publicly known. Clients often object to confidentiality because they are frustrated and angry about what happened to them and what the accused did. The accused often want confidentiality because of the dreaded perception of guilt that accompanies an agreement. On the other hand, secrecy itself may be contrary to public order and public protection – in short, it can lead to the prosecution of wrongdoing. Notwithstanding the risks, confidential transaction agreements can protect a client`s interests and result in a favourable outcome for all parties involved. By being aware of ethical risks, lawyers can help not to resuscitate a dispute that is the subject of litigation once it is resolved. It is routine that the confidentiality clause allows the amount of compensation to continue to tax advisors, accountants and legal or financial advisors. It is not as routine, though perhaps, a carve-out that allows a party to reveal the facts of the underlying claim to industry regulators, as permitted or required by law.