Confidentiality: Definition, Examples, How It Works (2023)

In law, confidentiality is a legal term that refers to the duty of an individual to refrain from sharing confidential information with others without the express consent of the other party. Confidentiality involves a set of rules or a promise, usually executed through a confidentiality agreement that limits access and places restrictions on certain types of information.

What Is Confidentiality?

Confidentiality refers to personal information shared with an attorney, physician, therapist, accountants, or other individuals that generally cannot be divulged to third parties without the express consent of the client. Lawyers are often required by law to keep confidential, anything pertaining to the representation of a client.

Legal confidentiality is the ethical duty of a lawyer not to disclose information relating to the representation of a client. In the matter of attorney-client privilege, the duty of confidentiality is in effect all the time, not just in the face of legal demands for client information. The duty of legal confidentiality is much broader than the attorney-client evidentiary privilege, which only covers communications between the attorney and the client.

Both the privilege and the duty serve the purpose of encouraging clients to speak frankly about their cases. This way, lawyers can carry out their duty to provide clients with zealous representation. Otherwise, the opposing side may be able to surprise the lawyer in court with something he did not know about his client, which may weaken the client’s position. Also, a distrustful client might hide a relevant fact he thinks is incriminating, but that a skilled lawyer could turn to the client’s advantage, such as raising affirmative defenses like self-defense.

While there are different definitions for the term, all the definitions pretty much mean the same thing, which is keeping information private unless you have the express consent of the party involved to divulge that information to a third party.

Here is an article that goes further into confidentiality.

Why Is Confidentiality Important?

There are several necessary purposes to maintain confidentiality between a client and his/her lawyer.

  • It promotes candid conversation between the lawyer and the client
  • It is essential in the attorney’s preparation of the client’s representation

If the attorney does not know the potential strengths and weaknesses of a matter, it would be nearly impossible to predict how his/her opponent will strategize. The principle of client-lawyer confidentiality is given effect by three related bodies of law.

  1. The attorney-client privilege
  2. The work-product privilege
  3. The rule of confidentiality established in professional ethics.

Settlement negotiations is another situation in which issues often arise. Commonly, the parties to a dispute will be ordered by the court to mediate the controversy before proceeding to trial.

Attorney-Client Privilege

Attorney-client privilege is an evidentiary rule that protects the attorneys and their clients from being compelled to disclose confidential communications between them for the purpose of furnishing or obtaining legal advice or assistance.

Work-Product Privilege

Work-product privilege protects from disclosure, the attorney’s notes and other materials prepared in anticipation of litigation.

Rule of Confidentiality Established in professional ethics

Rule 1.6 Confidentiality of Information.

This rule covers the following:

  • Client-Lawyer Relationship
  • Authorized Disclosure
  • Disclosure Adverse to Client
  • Detection of Conflicts of Interest
  • Acting Competently to Preserve Confidentiality
  • Former Client

As it relates to the rules of engagement, in any competitive situation, keeping certain information confidential is crucial.

You can also read more about Rule 1.6 by clicking here .

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What is Typically Considered Confidential Information?

Confidential information is any information or documentation that is considered private (non-public) to an individual or a business. This could be any information disclosed by either party to the other party, either directly or indirectly, in writing or orally. Following are examples of confidential information.

  • Non-disclosure agreement
  • Mutual nondisclosure agreement
  • One-sided nondisclosure agreement

Non-disclosure Agreement

A non-disclosure agreement (NDA) is a legally binding contract that establishes a confidential relationship. The party or parties signing the agreement agree that sensitive information they may obtain will not be made available to others. An NDA may also be referred to as a confidentiality agreement.

There are two types of NDAs: unilateral or mutual. A unilateral NDA is when one party agrees to keep information confidential. A mutual NDA is when both parties agree to keep information confidential.

This type of agreement is common for businesses entering into negotiations with other businesses. They allow the parties to share sensitive information without the fear that the information will end up in the hands of competitors.

Mutual Non-disclosure Agreement

A mutual non-disclosure agreement is when both parties agree to keep the information exchanged between them private. Unlike a unilateral non-disclosure agreement, with this type of non-disclosure agreement, both parties sign an agreement not to divulge sensitive information to others.

One-Sided Non-disclosure Agreement

A one-sided non-disclosure agreement is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the disclosing party wishes to share with the receiving party for purposes of an actual or potential relationship but wishes to restrict access to or by third parties.

If either party that signed a non-disclosure agreement breaks that agreement by divulging sensitive information to a third party without the consent of the other signing party, that is called a breach of contract . A person can be sued for breach of contract.

If you find yourself being sued for breach of contract, or you need to sue someone else for breach of contract, find out what the privacy law and confidentiality laws are in your state and then contact privacy lawyers or business lawyers to see what your legal options are.

For more information regarding non-disclosure agreements, refer to this article .

Examples of When You Need a Confidentiality Agreement?

Anytime there is an exchange of confidential information by one party to another party or there is a reciprocal exchange of information, a confidentiality agreement should be signed. This is especially important in commercial transactions and some legal matters. Following are some examples when you need a confidentiality agreement in place.

  • Trade Secrets
  • Scientific Information
  • Secret formulas
  • Computer Technology
  • Copyrights
  • Recipes
  • Prototypes and samples
  • Proprietary information has been shared
  • Concepts for future services, products, or practices

Other types of information you can protect with a confidentiality agreement include:

  • Business communication
  • Manufacturing processes
  • Certain business information, strategies, and operational procedures
  • Sales plans, materials, and marketing information
  • Marketing campaigns and projects
  • Details about clients and customers

In some cases, even if there is an agreement in place, one party can breach the contract, intentionally or unknowingly, by divulging proprietary information relating to the other signing party to a third party.

Confidentiality vs. Privacy

Confidentiality refers to personal information shared with an attorney, physician, therapist, or other individuals that generally cannot be divulged to third parties without the express consent of the client. Privacy refers to the freedom from intrusion into one’s personal matters, and personal information. The terms are used interchangeably, however, from a legal standpoint, they mean distinctly different things.

While confidentiality is an ethical duty, privacy is a right rooted in common law. Understanding the difference between the two terms can eliminate a lot of confusion when signing contracts, establishing a client-attorney relationship, and generally knowing your rights in a given situation.

Here is an article for more information relating to the difference between confidentiality and privacy.

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