Should Secret Settlements Be Allowed to Conceal Dangerous Products?

G.M. has announced the recall of 1.4 million cars due to a faulty ignition switch (N.Y. Times 2/28/14). It admits to 13 deaths related to the problem. Apparently the first, Brooke Melton of Georgia was killed in a 2010 crash, and her case was settled under a confidentiality agreement. I have been railing for decades against secret settlements which are designed to conceal information about dangerous or defective products from the public.

There are many instances in which confidentiality is appropriate when a case is settled. For instance, there is no reason to force the disclosure of the amount of the settlement. There also may be personal reasons to avoid disclosure. But frequently even those reasons can be to conceal wrongful conduct -- sexual harassment or abuse, malpractice by doctors, sexual molestation by priests, etc. On the other hand, cases are frequently settled privately to avoid humiliation, embarrassment, possible adverse economic consequences and expense from false or frivolous claims.

Defense lawyers justify their participation in these secrecy agreements which are not in the public interest by asserting their duty to their clients. Obviously publicizing a major defect will affect future sales and encourage further litigation. Plaintiffs and their lawyers are often given the choice of accepting a satisfactory settlement conditioned upon confidentiality or going to trial and choose the former as preferable.

What is needed is an ethical rule that prohibits lawyers from demanding or accepting confidentiality as a condition of settlement if there is a good faith belief that a product is defective and dangerous. If the agreement is good for the client but bad for the public, the public interest should prevail. Lawyers should not be party to concealing dangerous products and putting the public at risk.