NCPA - National Center for Policy Analysis

Legal Settlements: Should They Be Confidential?

September 20, 2002

Is it fair, necessary or in the public interest to require disclosure of settlement terms in court cases? Does the public's "right to know" override privacy considerations?

Judges can reject secret settlements, though few do so. But federal judges in South Carolina have approved a ban on sealed settlement that could take effect November 1, 2002.

Here are some of the pros and the cons in the controversy:

  • Openness advocates cite examples of how sealing records prevented potential victims from protecting themselves, such the sealing of sex-abuse charges against Catholic priests in Bridgeport, Conn., keeping documents concerning faulty Bridgestone/Firestone tires secret, and suppressing evidence in malpractice suits against doctors.
  • They also argue that under the proposed changes being considered in South Carolina, judges would retain authority to make exceptions when privacy rights outweigh the public interest.
  • On the other hand, advocates of confidentiality agreements protest that the vast majority of civil cases do not involve pedophile priests or dangerous products and that the "one-size-fits-all" approach is not conducive to the fair and equitable administration of justice.
  • They also contend that making settlement amounts widely known will discourage settlements and further clog the courts -- while driving up the cost of litigation.

Sources: Editorial, "Don't Keep Public in Dark," and Joyce Kraeger (Alliance of American Insurers), "Editorial: Ban on Sealed Cases Wrong," both in USA Today, September 20, 2002.

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