The UK’s proposed NDA reforms raise new exposures for employers and insurers. As restrictions tighten, EPL cover, settlement strategies and corporate oversight will need recalibrating


Major reforms to Non-Disclosure Agreements in the UK raise new exposures for employers and insurers, primarily focused on preventing the abuse of NDAs to silence victims and protect perpetrators of misconduct.

While some NDA-related protections are already active, a number of major components of the Employment Rights Act 2025 and related reforms are due to come into effect soon, including a planned ban on harassment and discrimination NDAs. This core provision of the Employment Rights Act 2025 will void any clause in an employment contract or settlement agreement that prevents a worker from disclosing harassment or discrimination.

As these issues move from policy debate to operational reality, employers, boards and insurers face the need to reassess exposures. The core direction is clear: NDA terms that purport to prevent victims or alleged victims from reporting misconduct to law enforcement, regulators or other specified channels will not be enforceable, even where the parties have agreed a financial settlement. At the same time, NDAs remain permissible for more traditional purposes – such as protecting trade secrets, commercially sensitive information and other confidential business data – provided they are not used to suppress complaints of unlawful treatment or to restrict wider whistleblowing and regulatory reporting. This creates a complex drafting and enforcement environment, especially in financial services, professional services and media, where reputational risk and people‑related conduct issues frequently intersect.

To better understand the implications of the incoming rules, CIR Magazine spoke to Matthew Leake, head of employment and labour relations law at Kennedys, about the key features and unintended consequences of the reforms; sectoral exposure; the future of ‘quiet’ settlements; implications for EPL underwriting, pricing and claims; and how boards and insurers can strengthen risk management support and oversight.

What key changes should employers understand about the UK’s latest NDA reforms?

The key change is that it will be more difficult for employers to have employees enter into Non-Disclosure Agreements that prohibit disclosures or allegations of harassment or discrimination. However, the measures are yet to be fully consulted and legislated on, so further detail is awaited, in particular as regards the type of NDAs that will still be permitted as exemptions. On that, it currently seems likely that some NDAs will still be permissible, at least in part, if the employee in question has been given prior independent legal advice, and has positively agreed to the NDA, although even then it is unlikely that such could prevent disclosure to criminal law authorities or certain regulators. The devil will be in the detail of secondary legislation yet to come.

Which industries or sectors are likely to be most exposed to these changes?

Those industries in the media, financial and professional services that might be at heightened exposure to high-value and high-profile harassment and discrimination claims are perhaps most likely to feel the effect of the changes.

What does the loss of the quiet settlement option mean for employers and insurers?

There is a real risk that the good intentions of the reforms will inadvertently make some claims less easy to settle and encourage or lengthen litigation, against the interest of all concerned. Regardless of the merits of a claim, an employer (and an employee) will often prefer to settle a sensitive dispute to avoid the uncertainty of litigation and the potential reputational harm that public proceedings can cause to either side, regardless of the outcome.

However, if the reforms are implemented in such a way that means that an employer cannot effectively ensure confidentiality, it might be discouraged from settlement entirely or insist on a level of reciprocity to enable it to state its side of the story in the event that an employee chooses to make a disclosure after settlement has been reached. It may also lead to employers feeling compelled to spend more time and resource investigating and formalising complaints before considering settlement, in order to demonstrate the steps they took in the event of the matter becoming public, again potentially delaying ‘the quiet settlement option’.

Finally, settlement agreements may become more nuanced and sophisticated in devising clauses to mitigate against the NDA restrictions, for example increased use of staged payments or more attention to the terms of agreed mutual public statements.

Are insurers likely to face more claims, and how should underwriting, policy terms, pricing, renewals and claims handling adapt?

The reforms to employment law generally (such as the shortening of the qualifying service for Unfair Dismissal, the extension of claim time limits and the removal of the Unfair Dismissal cap on compensation) mean that there are likely to be more EPL claims regardless of the particular reforms to NDAs, but the potential inadvertent impact of the NDA reforms in making settlement less attractive for employers in certain types of claim may mean more claims and/or more drawn-out claims.

Insurers may wish to review how relevant EPL or D&O policies might respond to potentially greater costs of investigating discrimination and harassment complaints, how premiums might reflect enhanced risk of claims arising or lasting longer, and what further diligence about harassment and discrimination issues should be carried out ahead of policy placement or renewal.

What are the implications for existing NDAs and historical claims – are there tail risks to consider?

The Government has stated that the reform to NDAs will not be retrospective and so there appears to be little implication to existing NDAs and claims.

How can insurers expand risk management support for clients – and what does this mean for board and senior management oversight?

The future claims landscape is such that EPL products can play an increasingly important role in helping clients with risk management. Those products might further develop to enhance the level of pre-claim preventative support that insurers can facilitate such as in helplines, training and other risk-mitigation services to insureds. Effective and demonstrable support for anti-harassment and discrimination steps at board and senior management level will be important for employers to mitigate risk.



NDA reform: A timeline

Pre-2025
NDAs widely used to settle employment and misconduct claims, with only general limits (eg. cannot exclude whistleblowing, reporting crime, or taking legal advice).

July 2025
Government confirmed plans to clamp down on NDAs that silence victims of harassment, discrimination and abuse, signalling an end to clauses that deter reporting to police, regulators and other official channels.

1st October 2025
Victims and Prisoners Act changes took effect. NDA terms seeking to prevent victims (or those who reasonably believe they are victims) of criminal conduct from making specified disclosures became unenforceable – narrowing the scope for ‘quiet’ settlements where potential criminality is in play.

18th December 2025
Employment Rights Act 2025 passed, creating the framework for further NDA restrictions in workplace harassment and discrimination cases, but leaving commencement to secondary legislation.

2026 and beyond
As implementing regulations are phased in, employers and insurers should expect tighter limits on NDAs in harassment and discrimination claims, sitting alongside wider employment law changes (time limits, compensation caps, unfair dismissal thresholds). Exact dates and detailed carve‑outs remain to be finalised.


Related reforms expected

Whistleblowing for Sexual Harassment (6th April 2026)
Reporting sexual harassment will formally become a ‘qualifying disclosure’, under whistleblowing law, protecting staff from detriment if they speak out.

Liability for Third-Party Harassment (October 2026)
Employers will become legally liable for harassment of staff by third parties (like customers) unless they have taken “all reasonable steps” to prevent it.

Extended Tribunal Deadlines (October 2026)
The time limit to bring a claim, including those involving disputed NDAs, will increase from three to six months.

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