Less Secrecy, More Justice

Is Republican presidential candidate Herman Cain a serial sexual harasser or the victim of frivolous or fallacious allegations? We don’t really know because the purported victims of his inappropriate behavior and Cain’s former employer, the National Restaurant Association, signed confidential settlement agreements that contractually require everyone to keep their mouths shut about what happened.

The political brouhaha caused by the media not having access to the facts of these complaints is just one tiny example of how pervasive secrecy within our civil justice system subverts the civic benefits of open and public litigation.

Civil justice isn’t just about providing an effective and efficient method for determining financial compensation and other remedies for those damaged by the negligence or intentional wrongdoing. The system also creates an effective deterrent to wrongdoing by powerful institutions and industries, and not just because of the money a court might order paid to their victims but, more significantly, because of the greater cost wrongdoers will pay from the adverse publicity generated by large damage awards.

Confidentiality agreements undermine these societal benefits and reduce the civil justice system to a forum in which parties use publicly funded courts to reach secret private agreements.

These confidential arrangements often harm others. We have seen many examples of unsafe products kept on the market long after these products would have been publicly exposed but for being shielded by confidentiality agreements. This often means people get hurt or even killed. Such a result wouldn’t have happened had the dangerous wares been withdrawn from sale or recalled after the danger came to light.

The arrangements also mean that the injured victims are essentially bribed into becoming complicit in that subsequent harm through their public silence, a price they had to pay in order to receive compensation that often is desperately needed.

Secrecy can be a double-edged sword that also victimizes the powerful. The business community often complains bitterly that an industry of ambulance-chasing lawyers peppers them with false or overblown legal claims, which are then settled secretly by liability insurance companies because that is cheaper than fighting to win in open court.

Remedying the situation wouldn’t necessarily require passing new laws, although that step is much to be desired. Judges could reduce the amount of secrecy immediately by informing litigants that, with the exception of cases involving minors, they will not approve secret settlements other than in rare and compelling circumstances.

The time has come to draw open the curtains. Confidentiality:

• Allows dangerous products to remain on the market.
• Protects the reputations of those who engage in systemic wrongdoing.
• Makes it easier for the unscrupulous to profit from bogus claims and defenses.
• Increases the cost of insurance.
• Adds to congestion in the courts.

Most ironically, secret settlements push the plaintiff and the defense, who should be legal adversaries, into a form of private collusion for which the rest of society pays.

Wesley J. Smith is a senior fellow for the Discovery Institute and co-author with Ralph Nader of “No Contest: Corporate Lawyers and the Perversion of Justice in America.”