Should Your Personal Injury Settlement Include Nondisclosure Clauses?

Many personal injury cases are resolved through a binding settlement between the two parties. However, should you include in your settlement a clause that prohibits either side from revealing its details? This clause, commonly called a nondisclosure agreement (NDA), is optional and may be requested by either party. Here are a few reasons you may want to consider it.

Why Might a Defendant Ask for an NDA?

The most common party to request a nondisclosure agreement, or NDA, is the insurance company, individual, or business being sued. The reason for this is usually two-fold. 

Many defendants don't want to risk damage to their reputation if the details of the accident or the injury settlement were made public. If you have to sue a property owner for negligence in maintaining their property, they may worry that agreeing to a settlement could make them appear guilty in the eyes of others. 

Even if the settlement doesn't actually make the defendant look bad, it could become grist for other personal injury cases. Future victims might use the details of a case the defendant previously settled as a boost for their own cases. Therefore, keeping those details private is prudent. 

Why Might a Plaintiff Ask for an NDA?

On more rare occasions, the victim, or plaintiff, requests the NDA. Why? This could protect their privacy on various matters. 

First, it protects medical privacy. Could any specific provisions of your agreement, such as damages for loss of consortium, imply or overtly indicate a particular medical problem? What if the settlement references drug or alcohol use that may have contributed to the accident? 

Your concern may also be about how you're viewed in the future. A person who was treated for mental health issues following an accident may not want future employers, partners, or strangers to know that they sought therapy. Or a person might want to preempt any future legal issues, such as a divorce, from being affected by this information. 

In addition, preventing the disclosure of damages helps you avoid being targeted by anyone seeking money. Who in your circle might ask for money if they knew you had received a windfall of thousands of dollars? What about charities, predatory businesses, or strangers looking for handouts? Minimize these risks by keeping your settlement to yourself. 

Where Can You Learn More?

Each party to a personal injury case must weigh the implications of a nondisclosure clause in their particular settlement. The best person to help you decide if this is in your best interests — no matter who might request it — is a qualified personal injury attorney in your state.

Contact a personal injury attorney to learn more.